Correlation Between Indian Railway and Yatra Online

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

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

Diversification Opportunities for Indian Railway and Yatra Online

0.58

Correlation Coefficient

Indian Railway  Yatra Online

Very weak diversification

The 3 months correlation between Indian and Yatra is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indian Railway Finance 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 Indian Railway 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 Indian Railway Finance 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 Indian Railway i.e., Indian Railway and Yatra Online go up and down completely randomly.

Pair Corralation between Indian Railway and Yatra Online

Assuming the 90 days trading horizon Indian Railway is expected to generate 1.04 times less return on investment than Yatra Online. But when comparing it to its historical volatility, Indian Railway Finance is 1.39 times less risky than Yatra Online. It trades about 0.05 of its potential returns per unit of risk. Yatra Online Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,611  in Yatra Online Limited on April 25, 2025 and sell it today you would earn a total of  385.00  from holding Yatra Online Limited or generate 4.47% return on investment over 90 days.

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

Indian Railway Finance  vs.  Yatra Online Limited

Indian Railway Finance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Indian Railway Finance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indian Railway may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Yatra Online Limited

Risk-Adjusted Performance

Weak

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

Pair Trading with Indian Railway and Yatra Online

The main advantage of trading using opposite Indian Railway and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Railway 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 Indian Railway Finance 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.