Correlation Between Expedia and ANTA Sports
Can any of the company-specific risk be diversified away by investing in both Expedia and ANTA Sports 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 Expedia and ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and ANTA Sports Products, you can compare the effects of market volatilities on Expedia and ANTA Sports 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 Expedia with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and ANTA Sports.
Diversification Opportunities for Expedia and ANTA Sports
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Expedia and ANTA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and Expedia 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 Expedia Group are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Expedia i.e., Expedia and ANTA Sports go up and down completely randomly.
Pair Corralation between Expedia and ANTA Sports
Assuming the 90 days trading horizon Expedia Group is expected to generate 0.92 times more return on investment than ANTA Sports. However, Expedia Group is 1.08 times less risky than ANTA Sports. It trades about 0.07 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.03 per unit of risk. If you would invest 8,651 in Expedia Group on August 28, 2024 and sell it today you would earn a total of 8,907 from holding Expedia Group or generate 102.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expedia Group vs. ANTA Sports Products
Performance |
| Timeline |
| Expedia Group |
| ANTA Sports Products |
Expedia and ANTA Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and ANTA Sports
The main advantage of trading using opposite Expedia and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, ANTA Sports 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 ANTA Sports will offset losses from the drop in ANTA Sports' long position.| Expedia vs. PLAYTIKA HOLDING DL 01 | Expedia vs. BOSTON BEER A | Expedia vs. SCANSOURCE | Expedia vs. Monster Beverage Corp |
| ANTA Sports vs. Merit Medical Systems | ANTA Sports vs. Microbot Medical | ANTA Sports vs. Elmos Semiconductor SE | ANTA Sports vs. Japan Medical Dynamic |
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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