Correlation Between Dow Jones and EXPEDIA
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By analyzing existing cross correlation between Dow Jones Industrial and EXPEDIA INC, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of EXPEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and EXPEDIA.
Diversification Opportunities for Dow Jones and EXPEDIA
Pay attention - limited upside
The 3 months correlation between Dow and EXPEDIA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and EXPEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPEDIA INC and Dow Jones 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 Dow Jones Industrial 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 INC has no effect on the direction of Dow Jones i.e., Dow Jones and EXPEDIA go up and down completely randomly.
Pair Corralation between Dow Jones and EXPEDIA
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.25 times more return on investment than EXPEDIA. However, Dow Jones is 1.25 times more volatile than EXPEDIA INC. It trades about 0.12 of its potential returns per unit of risk. EXPEDIA INC is currently generating about 0.03 per unit of risk. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.93% |
| Values | Daily Returns |
Dow Jones Industrial vs. EXPEDIA INC
Performance |
| Timeline |
Dow Jones and EXPEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
EXPEDIA INC
Pair trading matchups for EXPEDIA
Pair Trading with Dow Jones and EXPEDIA
The main advantage of trading using opposite Dow Jones and EXPEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| EXPEDIA vs. Trupanion | EXPEDIA vs. Sun Life Financial | EXPEDIA vs. Maiden Holdings | EXPEDIA vs. SunLink Health Systems |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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