Correlation Between Beyond Meat and Expedia
Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Expedia 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 Beyond Meat and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Expedia Group, you can compare the effects of market volatilities on Beyond Meat and Expedia 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 Beyond Meat with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Expedia.
Diversification Opportunities for Beyond Meat and Expedia
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beyond and Expedia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Beyond Meat 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 Beyond Meat are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Beyond Meat i.e., Beyond Meat and Expedia go up and down completely randomly.
Pair Corralation between Beyond Meat and Expedia
Assuming the 90 days trading horizon Beyond Meat is expected to under-perform the Expedia. In addition to that, Beyond Meat is 1.34 times more volatile than Expedia Group. It trades about -0.02 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.32 per unit of volatility. If you would invest 33,031 in Expedia Group on September 3, 2024 and sell it today you would earn a total of 23,753 from holding Expedia Group or generate 71.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Expedia Group
Performance |
| Timeline |
| Beyond Meat |
| Expedia Group |
Beyond Meat and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Expedia
The main advantage of trading using opposite Beyond Meat and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.| Beyond Meat vs. JBS SA | Beyond Meat vs. M Dias Branco | Beyond Meat vs. Marfrig Global Foods | Beyond Meat vs. Camil Alimentos SA |
| Expedia vs. BIONTECH SE DRN | Expedia vs. Raytheon Technologies | Expedia vs. Southwest Airlines Co | Expedia vs. Beyond Meat |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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