Correlation Between Amadeus IT and Travel Leisure
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and Travel Leisure 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 Travel Leisure 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 Travel Leisure Co, you can compare the effects of market volatilities on Amadeus IT and Travel Leisure 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 Travel Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Travel Leisure.
Diversification Opportunities for Amadeus IT and Travel Leisure
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amadeus and Travel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Holding and Travel Leisure Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Leisure 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 Travel Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Leisure has no effect on the direction of Amadeus IT i.e., Amadeus IT and Travel Leisure go up and down completely randomly.
Pair Corralation between Amadeus IT and Travel Leisure
Assuming the 90 days horizon Amadeus IT is expected to generate 11.79 times less return on investment than Travel Leisure. But when comparing it to its historical volatility, Amadeus IT Holding is 1.42 times less risky than Travel Leisure. It trades about 0.01 of its potential returns per unit of risk. Travel Leisure Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,806 in Travel Leisure Co on August 31, 2024 and sell it today you would earn a total of 1,781 from holding Travel Leisure Co or generate 46.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amadeus IT Holding vs. Travel Leisure Co
Performance |
| Timeline |
| Amadeus IT Holding |
| Travel Leisure |
Amadeus IT and Travel Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and Travel Leisure
The main advantage of trading using opposite Amadeus IT and Travel Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, Travel Leisure 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 Travel Leisure will offset losses from the drop in Travel Leisure's long position.| Amadeus IT vs. Arma Services | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
| Travel Leisure vs. Yatra Online | Travel Leisure vs. Despegar Corp | Travel Leisure vs. Lindblad Expeditions Holdings | Travel Leisure vs. Mondee Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |