Correlation Between ROUTE MOBILE and Yes Bank

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

By analyzing existing cross correlation between ROUTE MOBILE LIMITED and Yes Bank Limited, you can compare the effects of market volatilities on ROUTE MOBILE and Yes Bank 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 ROUTE MOBILE with a short position of Yes Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROUTE MOBILE and Yes Bank.

Diversification Opportunities for ROUTE MOBILE and Yes Bank

0.81

Correlation Coefficient

ROUTE MOBILE  Yes Bank

Very poor diversification

The 3 months correlation between ROUTE and Yes is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ROUTE MOBILE LIMITED and Yes Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yes Bank Limited and ROUTE MOBILE 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 ROUTE MOBILE LIMITED are associated (or correlated) with Yes Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yes Bank Limited has no effect on the direction of ROUTE MOBILE i.e., ROUTE MOBILE and Yes Bank go up and down completely randomly.

Pair Corralation between ROUTE MOBILE and Yes Bank

Assuming the 90 days trading horizon ROUTE MOBILE LIMITED is expected to generate 0.75 times more return on investment than Yes Bank. However, ROUTE MOBILE LIMITED is 1.34 times less risky than Yes Bank. It trades about 0.03 of its potential returns per unit of risk. Yes Bank Limited is currently generating about 0.02 per unit of risk. If you would invest  119,189  in ROUTE MOBILE LIMITED on September 18, 2024 and sell it today you would earn a total of  23,961  from holding ROUTE MOBILE LIMITED or generate 20.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.59%
Values	Daily Returns

ROUTE MOBILE LIMITED  vs.  Yes Bank Limited

ROUTE MOBILE LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ROUTE MOBILE LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting 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.

Yes Bank Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yes Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with ROUTE MOBILE and Yes Bank

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

The idea behind ROUTE MOBILE LIMITED and Yes Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.