Correlation Between Yatra Online and Shivalik Bimetal

Can any of the company-specific risk be diversified away by investing in both Yatra Online and Shivalik Bimetal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yatra Online and Shivalik Bimetal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yatra Online Limited and Shivalik Bimetal Controls, you can compare the effects of market volatilities on Yatra Online and Shivalik Bimetal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yatra Online with a short position of Shivalik Bimetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and Shivalik Bimetal.

Diversification Opportunities for Yatra Online and Shivalik Bimetal

0.06

Correlation Coefficient

Yatra Online  Shivalik Bimetal

Significant diversification

The 3 months correlation between Yatra and Shivalik is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online Limited and Shivalik Bimetal Controls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shivalik Bimetal Controls and Yatra Online is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yatra Online Limited are associated (or correlated) with Shivalik Bimetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shivalik Bimetal Controls has no effect on the direction of Yatra Online i.e., Yatra Online and Shivalik Bimetal go up and down completely randomly.

Pair Corralation between Yatra Online and Shivalik Bimetal

Assuming the 90 days trading horizon Yatra Online Limited is expected to under-perform the Shivalik Bimetal. But the stock apears to be less risky and, when comparing its historical volatility, Yatra Online Limited is 1.22 times less risky than Shivalik Bimetal. The stock trades about -0.17 of its potential returns per unit of risk. The Shivalik Bimetal Controls is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  57,399  in Shivalik Bimetal Controls on September 12, 2024 and sell it today you would earn a total of  2,601  from holding Shivalik Bimetal Controls or generate 4.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yatra Online Limited  vs.  Shivalik Bimetal Controls

Yatra Online Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yatra Online Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Shivalik Bimetal Controls

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shivalik Bimetal Controls are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Shivalik Bimetal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yatra Online and Shivalik Bimetal

The main advantage of trading using opposite Yatra Online and Shivalik Bimetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatra Online position performs unexpectedly, Shivalik Bimetal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shivalik Bimetal will offset losses from the drop in Shivalik Bimetal's long position.

The idea behind Yatra Online Limited and Shivalik Bimetal Controls pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.