Correlation Between Airbnb and Flight Centre
Can any of the company-specific risk be diversified away by investing in both Airbnb and Flight Centre 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 Airbnb and Flight Centre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbnb Inc and Flight Centre Travel, you can compare the effects of market volatilities on Airbnb and Flight Centre 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 Airbnb with a short position of Flight Centre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbnb and Flight Centre.
Diversification Opportunities for Airbnb and Flight Centre
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Airbnb and Flight is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Airbnb Inc and Flight Centre Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flight Centre Travel and Airbnb 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 Airbnb Inc are associated (or correlated) with Flight Centre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flight Centre Travel has no effect on the direction of Airbnb i.e., Airbnb and Flight Centre go up and down completely randomly.
Pair Corralation between Airbnb and Flight Centre
If you would invest 13,778 in Airbnb Inc on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Airbnb Inc or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
Airbnb Inc vs. Flight Centre Travel
Performance |
| Timeline |
| Airbnb Inc |
| Flight Centre Travel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Airbnb and Flight Centre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbnb and Flight Centre
The main advantage of trading using opposite Airbnb and Flight Centre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbnb position performs unexpectedly, Flight Centre 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 Flight Centre will offset losses from the drop in Flight Centre's long position.| Airbnb vs. Norwegian Cruise Line | Airbnb vs. Royal Caribbean Cruises | Airbnb vs. Expedia Group | Airbnb vs. Booking Holdings |
| Flight Centre vs. Norwegian Cruise Line | Flight Centre vs. Carnival | Flight Centre vs. Airbnb Inc | Flight Centre vs. Expedia 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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