Correlation Between Amadeus IT and Flight Centre
Can any of the company-specific risk be diversified away by investing in both Amadeus IT 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 Amadeus IT and Flight Centre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Holding and Flight Centre Travel, you can compare the effects of market volatilities on Amadeus IT 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 Amadeus IT with a short position of Flight Centre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Flight Centre.
Diversification Opportunities for Amadeus IT and Flight Centre
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amadeus and Flight is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Holding 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 Amadeus IT 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 Amadeus IT Holding 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 Amadeus IT i.e., Amadeus IT and Flight Centre go up and down completely randomly.
Pair Corralation between Amadeus IT and Flight Centre
Assuming the 90 days horizon Amadeus IT is expected to generate 3.94 times less return on investment than Flight Centre. In addition to that, Amadeus IT is 8.1 times more volatile than Flight Centre Travel. It trades about 0.0 of its total potential returns per unit of risk. Flight Centre Travel is currently generating about 0.12 per unit of volatility. If you would invest 1,400 in Flight Centre Travel on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Flight Centre Travel or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 58.73% |
| Values | Daily Returns |
Amadeus IT Holding vs. Flight Centre Travel
Performance |
| Timeline |
| Amadeus IT Holding |
| Flight Centre Travel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amadeus IT and Flight Centre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and Flight Centre
The main advantage of trading using opposite Amadeus IT and Flight Centre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT 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.| Amadeus IT vs. Arma Services | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |