Correlation Between Strategic Investments and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Corporate Travel 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 Strategic Investments and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Corporate Travel Management, you can compare the effects of market volatilities on Strategic Investments and Corporate Travel 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 Strategic Investments with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Corporate Travel.
Diversification Opportunities for Strategic Investments and Corporate Travel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and Corporate is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Strategic Investments i.e., Strategic Investments and Corporate Travel go up and down completely randomly.
Pair Corralation between Strategic Investments and Corporate Travel
Assuming the 90 days horizon Strategic Investments is expected to generate 7.91 times less return on investment than Corporate Travel. In addition to that, Strategic Investments is 1.59 times more volatile than Corporate Travel Management. It trades about 0.02 of its total potential returns per unit of risk. Corporate Travel Management is currently generating about 0.27 per unit of volatility. If you would invest 865.00 in Corporate Travel Management on November 28, 2024 and sell it today you would earn a total of 155.00 from holding Corporate Travel Management or generate 17.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Corporate Travel Management
Performance |
| Timeline |
| Strategic Investments |
| Corporate Travel Man |
Strategic Investments and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Corporate Travel
The main advantage of trading using opposite Strategic Investments and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| Strategic Investments vs. DELTA AIR LINES | Strategic Investments vs. Plastic Omnium | Strategic Investments vs. Alaska Air Group | Strategic Investments vs. Norwegian Air Shuttle |
| Corporate Travel vs. CONAGRA FOODS | Corporate Travel vs. GWILLI FOOD | Corporate Travel vs. China Railway Construction | Corporate Travel vs. DAIRY FARM INTL |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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