Correlation Between Corporate Travel and EDISON INTL
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and EDISON INTL 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 Corporate Travel and EDISON INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and EDISON INTL, you can compare the effects of market volatilities on Corporate Travel and EDISON INTL 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 Corporate Travel with a short position of EDISON INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and EDISON INTL.
Diversification Opportunities for Corporate Travel and EDISON INTL
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and EDISON is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and EDISON INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with EDISON INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL has no effect on the direction of Corporate Travel i.e., Corporate Travel and EDISON INTL go up and down completely randomly.
Pair Corralation between Corporate Travel and EDISON INTL
Assuming the 90 days trading horizon Corporate Travel is expected to generate 14.54 times less return on investment than EDISON INTL. In addition to that, Corporate Travel is 2.72 times more volatile than EDISON INTL. It trades about 0.0 of its total potential returns per unit of risk. EDISON INTL is currently generating about 0.08 per unit of volatility. If you would invest 5,897 in EDISON INTL on September 3, 2024 and sell it today you would earn a total of 2,427 from holding EDISON INTL or generate 41.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. EDISON INTL
Performance |
| Timeline |
| Corporate Travel Man |
| EDISON INTL |
Corporate Travel and EDISON INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and EDISON INTL
The main advantage of trading using opposite Corporate Travel and EDISON INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, EDISON INTL 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 EDISON INTL will offset losses from the drop in EDISON INTL's long position.| Corporate Travel vs. EPSILON HEALTHCARE LTD | Corporate Travel vs. North American Construction | Corporate Travel vs. H FARM SPA | Corporate Travel vs. Cardinal Health |
| EDISON INTL vs. Molson Coors Beverage | EDISON INTL vs. STRAYER EDUCATION | EDISON INTL vs. Zijin Mining Group | EDISON INTL vs. DeVry Education Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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