Correlation Between Avis Budget and Viking Holdings
Can any of the company-specific risk be diversified away by investing in both Avis Budget and Viking Holdings 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 Avis Budget and Viking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avis Budget Group and Viking Holdings, you can compare the effects of market volatilities on Avis Budget and Viking Holdings 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 Avis Budget with a short position of Viking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avis Budget and Viking Holdings.
Diversification Opportunities for Avis Budget and Viking Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avis and Viking is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Avis Budget Group and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Holdings and Avis Budget 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 Avis Budget Group are associated (or correlated) with Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Avis Budget i.e., Avis Budget and Viking Holdings go up and down completely randomly.
Pair Corralation between Avis Budget and Viking Holdings
Considering the 90-day investment horizon Avis Budget Group is expected to under-perform the Viking Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Avis Budget Group is 1.14 times less risky than Viking Holdings. The stock trades about -0.53 of its potential returns per unit of risk. The Viking Holdings is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 4,652 in Viking Holdings on October 7, 2024 and sell it today you would lose (370.00) from holding Viking Holdings or give up 7.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avis Budget Group vs. Viking Holdings
Performance |
| Timeline |
| Avis Budget Group |
| Viking Holdings |
Avis Budget and Viking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avis Budget and Viking Holdings
The main advantage of trading using opposite Avis Budget and Viking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avis Budget position performs unexpectedly, Viking Holdings 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 Viking Holdings will offset losses from the drop in Viking Holdings' long position.| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
| Viking Holdings vs. GE Vernova LLC | Viking Holdings vs. Verde Clean Fuels | Viking Holdings vs. Kinetik Holdings | Viking Holdings vs. Kenon Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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