Correlation Between Yatra Online and DraftKings

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

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

Diversification Opportunities for Yatra Online and DraftKings

0.3

Correlation Coefficient

Yatra Online  DraftKings

Weak diversification

The 3 months correlation between Yatra and DraftKings is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Yatra Online and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings 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 DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of Yatra Online i.e., Yatra Online and DraftKings go up and down completely randomly.

Pair Corralation between Yatra Online and DraftKings

Given the investment horizon of 90 days Yatra Online is expected to generate 1.48 times more return on investment than DraftKings. However, Yatra Online is 1.48 times more volatile than DraftKings. It trades about 0.22 of its potential returns per unit of risk. DraftKings is currently generating about -0.09 per unit of risk. If you would invest  130.00  in Yatra Online on February 26, 2024 and sell it today you would earn a total of  23.00  from holding Yatra Online or generate 17.69% return on investment over 90 days.

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

Yatra Online  vs.  DraftKings

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 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.

DraftKings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DraftKings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DraftKings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Yatra Online and DraftKings

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

The idea behind Yatra Online and DraftKings 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 Global Correlations module to find global opportunities by holding instruments from different markets.