Correlation Between Yatra Online and TripAdvisor

Can any of the company-specific risk be diversified away by investing in both Yatra Online and TripAdvisor 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 TripAdvisor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yatra Online and TripAdvisor, you can compare the effects of market volatilities on Yatra Online and TripAdvisor 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 TripAdvisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatra Online and TripAdvisor.

Diversification Opportunities for Yatra Online and TripAdvisor

-0.12

Correlation Coefficient

Yatra Online  TripAdvisor

Good diversification

The 3 months correlation between Yatra and TripAdvisor is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online and TripAdvisor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TripAdvisor 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 are associated (or correlated) with TripAdvisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TripAdvisor has no effect on the direction of Yatra Online i.e., Yatra Online and TripAdvisor go up and down completely randomly.

Pair Corralation between Yatra Online and TripAdvisor

Given the investment horizon of 90 days Yatra Online is expected to generate 1.36 times more return on investment than TripAdvisor. However, Yatra Online is 1.36 times more volatile than TripAdvisor. It trades about -0.01 of its potential returns per unit of risk. TripAdvisor is currently generating about -0.07 per unit of risk. If you would invest  164.00  in Yatra Online on September 13, 2024 and sell it today you would lose (21.00) from holding Yatra Online or give up 12.8% of portfolio value over 90 days.

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

Yatra Online  vs.  TripAdvisor

Yatra Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yatra Online has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TripAdvisor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TripAdvisor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, TripAdvisor is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Yatra Online and TripAdvisor

The main advantage of trading using opposite Yatra Online and TripAdvisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatra Online position performs unexpectedly, TripAdvisor 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 TripAdvisor will offset losses from the drop in TripAdvisor's long position.

The idea behind Yatra Online and TripAdvisor 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.