Correlation Between Yatra Online and Playa Hotels

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

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

Diversification Opportunities for Yatra Online and Playa Hotels

0.11

Correlation Coefficient

Yatra Online  Playa Hotels

Average diversification

The 3 months correlation between Yatra and Playa is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts and Yatra Online 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 Yatra Online are associated (or correlated) with Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Yatra Online i.e., Yatra Online and Playa Hotels go up and down completely randomly.

Pair Corralation between Yatra Online and Playa Hotels

Given the investment horizon of 90 days Yatra Online is expected to under-perform the Playa Hotels. In addition to that, Yatra Online is 1.89 times more volatile than Playa Hotels Resorts. It trades about -0.01 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.03 per unit of volatility. If you would invest  684.00  in Playa Hotels Resorts on February 21, 2024 and sell it today you would earn a total of  168.00  from holding Playa Hotels Resorts or generate 24.56% return on investment over 90 days.

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

Yatra Online  vs.  Playa Hotels Resorts

Yatra Online

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yatra Online are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yatra Online is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Playa Hotels Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playa Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Playa Hotels is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yatra Online and Playa Hotels

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

The idea behind Yatra Online and Playa Hotels Resorts 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.