Correlation Between GreenTree Hospitality and Yatra Online

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

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

Diversification Opportunities for GreenTree Hospitality and Yatra Online

0.44

Correlation Coefficient

GreenTree Hospitality  Yatra Online

Very weak diversification

The 3 months correlation between GreenTree and Yatra is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and GreenTree Hospitality 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 GreenTree Hospitality Group 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 has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and Yatra Online go up and down completely randomly.

Pair Corralation between GreenTree Hospitality and Yatra Online

Considering the 90-day investment horizon GreenTree Hospitality Group is expected to generate 0.92 times more return on investment than Yatra Online. However, GreenTree Hospitality Group is 1.09 times less risky than Yatra Online. It trades about -0.03 of its potential returns per unit of risk. Yatra Online is currently generating about -0.33 per unit of risk. If you would invest  319.00  in GreenTree Hospitality Group on January 31, 2024 and sell it today you would lose (9.00) from holding GreenTree Hospitality Group or give up 2.82% of portfolio value over 90 days.

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

GreenTree Hospitality Group  vs.  Yatra Online

GreenTree Hospitality

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenTree Hospitality Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, GreenTree Hospitality is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GreenTree Hospitality and Yatra Online

The main advantage of trading using opposite GreenTree Hospitality and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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 GreenTree Hospitality Group and Yatra Online 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.