Correlation Between Expedia and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Expedia and Dine 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 Dine 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 Dine Brands Global, you can compare the effects of market volatilities on Expedia and Dine 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and Dine Brands.
Diversification Opportunities for Expedia and Dine Brands
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Expedia and Dine is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Expedia i.e., Expedia and Dine Brands go up and down completely randomly.
Pair Corralation between Expedia and Dine Brands
Given the investment horizon of 90 days Expedia Group is expected to generate 0.43 times more return on investment than Dine Brands. However, Expedia Group is 2.31 times less risky than Dine Brands. It trades about 0.31 of its potential returns per unit of risk. Dine Brands Global is currently generating about 0.1 per unit of risk. If you would invest 13,674 in Expedia Group on September 2, 2024 and sell it today you would earn a total of 4,788 from holding Expedia Group or generate 35.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expedia Group vs. Dine Brands Global
Performance |
| Timeline |
| Expedia Group |
| Dine Brands Global |
Expedia and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and Dine Brands
The main advantage of trading using opposite Expedia and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, Dine 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Expedia vs. Mondee Holdings | Expedia vs. MakeMyTrip Limited | Expedia vs. Tuniu Corp | Expedia vs. TripAdvisor |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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