Correlation Between Baosheng Media and Travelzoo
Can any of the company-specific risk be diversified away by investing in both Baosheng Media and Travelzoo 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 Baosheng Media and Travelzoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baosheng Media Group and Travelzoo, you can compare the effects of market volatilities on Baosheng Media and Travelzoo 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 Baosheng Media with a short position of Travelzoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baosheng Media and Travelzoo.
Diversification Opportunities for Baosheng Media and Travelzoo
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baosheng and Travelzoo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baosheng Media Group and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo and Baosheng Media 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 Baosheng Media Group are associated (or correlated) with Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Baosheng Media i.e., Baosheng Media and Travelzoo go up and down completely randomly.
Pair Corralation between Baosheng Media and Travelzoo
Given the investment horizon of 90 days Baosheng Media Group is expected to under-perform the Travelzoo. In addition to that, Baosheng Media is 1.03 times more volatile than Travelzoo. It trades about -0.03 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.37 per unit of volatility. If you would invest 1,293 in Travelzoo on August 23, 2024 and sell it today you would earn a total of 618.00 from holding Travelzoo or generate 47.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baosheng Media Group vs. Travelzoo
Performance |
| Timeline |
| Baosheng Media Group |
| Travelzoo |
Baosheng Media and Travelzoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baosheng Media and Travelzoo
The main advantage of trading using opposite Baosheng Media and Travelzoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baosheng Media position performs unexpectedly, Travelzoo 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 Travelzoo will offset losses from the drop in Travelzoo's long position.The idea behind Baosheng Media Group and Travelzoo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |