Correlation Between HDFC Asset and Yatra Online

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

By analyzing existing cross correlation between HDFC Asset Management and Yatra Online Limited, you can compare the effects of market volatilities on HDFC Asset and Yatra Online 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 HDFC Asset with a short position of Yatra Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of HDFC Asset and Yatra Online.

Diversification Opportunities for HDFC Asset and Yatra Online

0.32

Correlation Coefficient

HDFC Asset  Yatra Online

Weak diversification

The 3 months correlation between HDFC and Yatra is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Asset Management and Yatra Online Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online Limited and HDFC Asset 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 HDFC Asset Management are associated (or correlated) with Yatra Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatra Online Limited has no effect on the direction of HDFC Asset i.e., HDFC Asset and Yatra Online go up and down completely randomly.

Pair Corralation between HDFC Asset and Yatra Online

Assuming the 90 days trading horizon HDFC Asset is expected to generate 5.27 times less return on investment than Yatra Online. But when comparing it to its historical volatility, HDFC Asset Management is 1.95 times less risky than Yatra Online. It trades about 0.06 of its potential returns per unit of risk. Yatra Online Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  10,387  in Yatra Online Limited on September 30, 2024 and sell it today you would earn a total of  780.00  from holding Yatra Online Limited or generate 7.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

HDFC Asset Management  vs.  Yatra Online Limited

HDFC Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HDFC Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HDFC Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with HDFC Asset and Yatra Online

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

The idea behind HDFC Asset Management and Yatra Online Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.