Correlation Between Booking Holdings and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both Booking Holdings and Amadeus IT 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 Booking Holdings and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and Amadeus IT Group, you can compare the effects of market volatilities on Booking Holdings and Amadeus IT 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 Booking Holdings with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and Amadeus IT.
Diversification Opportunities for Booking Holdings and Amadeus IT
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Booking and Amadeus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and Booking Holdings 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 Booking Holdings are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of Booking Holdings i.e., Booking Holdings and Amadeus IT go up and down completely randomly.
Pair Corralation between Booking Holdings and Amadeus IT
Given the investment horizon of 90 days Booking Holdings is expected to generate 0.54 times more return on investment than Amadeus IT. However, Booking Holdings is 1.84 times less risky than Amadeus IT. It trades about 0.17 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.02 per unit of risk. If you would invest 377,267 in Booking Holdings on August 24, 2024 and sell it today you would earn a total of 143,825 from holding Booking Holdings or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Booking Holdings vs. Amadeus IT Group
Performance |
| Timeline |
| Booking Holdings |
| Amadeus IT Group |
Booking Holdings and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking Holdings and Amadeus IT
The main advantage of trading using opposite Booking Holdings and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| Booking Holdings vs. TripAdvisor | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. Royal Caribbean Cruises | Booking Holdings vs. Norwegian Cruise Line |
| Amadeus IT vs. SosTravel SPA | Amadeus IT vs. Arma Services | Amadeus IT vs. Transat AT | Amadeus IT vs. TUI AG |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |