Correlation Between TripAdvisor and Yatra Online

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

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

Diversification Opportunities for TripAdvisor and Yatra Online

-0.21

Correlation Coefficient

TripAdvisor  Yatra Online

Very good diversification

The 3 months correlation between TripAdvisor and Yatra is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding TripAdvisor and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and TripAdvisor 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 TripAdvisor 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 TripAdvisor i.e., TripAdvisor and Yatra Online go up and down completely randomly.

Pair Corralation between TripAdvisor and Yatra Online

Given the investment horizon of 90 days TripAdvisor is expected to generate 1.04 times less return on investment than Yatra Online. But when comparing it to its historical volatility, TripAdvisor is 1.24 times less risky than Yatra Online. It trades about 0.02 of its potential returns per unit of risk. Yatra Online is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  149.00  in Yatra Online on February 5, 2024 and sell it today you would lose (5.00) from holding Yatra Online or give up 3.36% of portfolio value over 90 days.

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

TripAdvisor  vs.  Yatra Online

TripAdvisor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TripAdvisor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward indicators, TripAdvisor reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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.

Pair Trading with TripAdvisor and Yatra Online

The main advantage of trading using opposite TripAdvisor and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TripAdvisor 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 TripAdvisor 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.

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 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.