Correlation Between Expedia and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Expedia and Bloomin Brands 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 Bloomin Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and Bloomin Brands, you can compare the effects of market volatilities on Expedia and Bloomin Brands 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 Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and Bloomin Brands.
Diversification Opportunities for Expedia and Bloomin Brands
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Expedia and Bloomin is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands 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 Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Expedia i.e., Expedia and Bloomin Brands go up and down completely randomly.
Pair Corralation between Expedia and Bloomin Brands
Given the investment horizon of 90 days Expedia Group is expected to generate 0.39 times more return on investment than Bloomin Brands. However, Expedia Group is 2.54 times less risky than Bloomin Brands. It trades about 0.36 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.14 per unit of risk. If you would invest 16,115 in Expedia Group on August 31, 2024 and sell it today you would earn a total of 2,377 from holding Expedia Group or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expedia Group vs. Bloomin Brands
Performance |
| Timeline |
| Expedia Group |
| Bloomin Brands |
Expedia and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and Bloomin Brands
The main advantage of trading using opposite Expedia and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.| Expedia vs. Airbnb Inc | Expedia vs. TripAdvisor | Expedia vs. Royal Caribbean Cruises | Expedia vs. Norwegian Cruise Line |
| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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