Correlation Between Corporate Travel and New York
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and New York 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 New York 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 The New York, you can compare the effects of market volatilities on Corporate Travel and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and New York.
Diversification Opportunities for Corporate Travel and New York
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Corporate and New is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of Corporate Travel i.e., Corporate Travel and New York go up and down completely randomly.
Pair Corralation between Corporate Travel and New York
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 1.7 times more return on investment than New York. However, Corporate Travel is 1.7 times more volatile than The New York. It trades about 0.1 of its potential returns per unit of risk. The New York is currently generating about 0.01 per unit of risk. If you would invest 745.00 in Corporate Travel Management on August 25, 2024 and sell it today you would earn a total of 95.00 from holding Corporate Travel Management or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. The New York
Performance |
| Timeline |
| Corporate Travel Man |
| New York |
Corporate Travel and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and New York
The main advantage of trading using opposite Corporate Travel and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
| New York vs. AUSTEVOLL SEAFOOD | New York vs. Corporate Travel Management | New York vs. NIPPON MEAT PACKERS | New York vs. CN MODERN DAIRY |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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