Correlation Between Arena Group and Trivago NV
Can any of the company-specific risk be diversified away by investing in both Arena Group and Trivago NV 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 Arena Group and Trivago NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Trivago NV, you can compare the effects of market volatilities on Arena Group and Trivago NV 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 Arena Group with a short position of Trivago NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Trivago NV.
Diversification Opportunities for Arena Group and Trivago NV
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arena and Trivago is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Trivago NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trivago NV and Arena Group 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 Arena Group Holdings are associated (or correlated) with Trivago NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trivago NV has no effect on the direction of Arena Group i.e., Arena Group and Trivago NV go up and down completely randomly.
Pair Corralation between Arena Group and Trivago NV
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 10.17 times more return on investment than Trivago NV. However, Arena Group is 10.17 times more volatile than Trivago NV. It trades about 0.09 of its potential returns per unit of risk. Trivago NV is currently generating about 0.07 per unit of risk. If you would invest 91.00 in Arena Group Holdings on August 31, 2024 and sell it today you would earn a total of 61.00 from holding Arena Group Holdings or generate 67.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Group Holdings vs. Trivago NV
Performance |
| Timeline |
| Arena Group Holdings |
| Trivago NV |
Arena Group and Trivago NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Trivago NV
The main advantage of trading using opposite Arena Group and Trivago NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Trivago NV 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 Trivago NV will offset losses from the drop in Trivago NV's long position.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
| Trivago NV vs. Upexi Inc | Trivago NV vs. Cheetah Mobile | Trivago NV vs. Comscore | Trivago NV vs. PropertyGuru 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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