Correlation Between TUI AG and Yatra Online

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

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

Diversification Opportunities for TUI AG and Yatra Online

0.6

Correlation Coefficient

TUI AG  Yatra Online

Poor diversification

The 3 months correlation between TUI and Yatra is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and Yatra Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatra Online and TUI AG 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 TUI AG 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 TUI AG i.e., TUI AG and Yatra Online go up and down completely randomly.

Pair Corralation between TUI AG and Yatra Online

Assuming the 90 days horizon TUI AG is expected to under-perform the Yatra Online. But the pink sheet apears to be less risky and, when comparing its historical volatility, TUI AG is 1.04 times less risky than Yatra Online. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Yatra Online is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  161.00  in Yatra Online on February 28, 2024 and sell it today you would lose (2.00) from holding Yatra Online or give up 1.24% of portfolio value over 90 days.

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

TUI AG  vs.  Yatra Online

TUI AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TUI AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, TUI AG 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

Weak

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

Pair Trading with TUI AG and Yatra Online

The main advantage of trading using opposite TUI AG and Yatra Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUI AG 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 TUI AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.