Correlation Between Booking Holdings and Lagardere
Can any of the company-specific risk be diversified away by investing in both Booking Holdings and Lagardere 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 Lagardere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and Lagardere SA, you can compare the effects of market volatilities on Booking Holdings and Lagardere 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 Lagardere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and Lagardere.
Diversification Opportunities for Booking Holdings and Lagardere
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Booking and Lagardere is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and Lagardere SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagardere SA 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 Lagardere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagardere SA has no effect on the direction of Booking Holdings i.e., Booking Holdings and Lagardere go up and down completely randomly.
Pair Corralation between Booking Holdings and Lagardere
Given the investment horizon of 90 days Booking Holdings is expected to generate 1.05 times more return on investment than Lagardere. However, Booking Holdings is 1.05 times more volatile than Lagardere SA. It trades about 0.13 of its potential returns per unit of risk. Lagardere SA is currently generating about 0.03 per unit of risk. If you would invest 195,419 in Booking Holdings on September 13, 2024 and sell it today you would earn a total of 333,881 from holding Booking Holdings or generate 170.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.0% |
| Values | Daily Returns |
Booking Holdings vs. Lagardere SA
Performance |
| Timeline |
| Booking Holdings |
| Lagardere SA |
Booking Holdings and Lagardere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking Holdings and Lagardere
The main advantage of trading using opposite Booking Holdings and Lagardere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings position performs unexpectedly, Lagardere 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 Lagardere will offset losses from the drop in Lagardere's long position.| Booking Holdings vs. TripAdvisor | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. Royal Caribbean Cruises | Booking Holdings vs. Norwegian Cruise Line |
| Lagardere vs. Todos Medical | Lagardere vs. Cardinal Health | Lagardere vs. Sapiens International | Lagardere vs. SmartStop Self Storage |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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