Correlation Between Expedia and Shimano
Can any of the company-specific risk be diversified away by investing in both Expedia and Shimano 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 Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and Shimano, you can compare the effects of market volatilities on Expedia and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and Shimano.
Diversification Opportunities for Expedia and Shimano
Pay attention - limited upside
The 3 months correlation between Expedia and Shimano is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of Expedia i.e., Expedia and Shimano go up and down completely randomly.
Pair Corralation between Expedia and Shimano
Assuming the 90 days trading horizon Expedia Group is expected to generate 1.4 times more return on investment than Shimano. However, Expedia is 1.4 times more volatile than Shimano. It trades about 0.07 of its potential returns per unit of risk. Shimano is currently generating about -0.01 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expedia Group vs. Shimano
Performance |
| Timeline |
| Expedia Group |
| Shimano |
Expedia and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and Shimano
The main advantage of trading using opposite Expedia and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| Expedia vs. PLAYTIKA HOLDING DL 01 | Expedia vs. BOSTON BEER A | Expedia vs. SCANSOURCE | Expedia vs. Monster Beverage Corp |
| Shimano vs. NH HOTEL GROUP | Shimano vs. SLR Investment Corp | Shimano vs. The City of | Shimano vs. ECHO INVESTMENT ZY |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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