Correlation Between Expedia and NIP Group
Can any of the company-specific risk be diversified away by investing in both Expedia and NIP Group 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 NIP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and NIP Group American, you can compare the effects of market volatilities on Expedia and NIP Group 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 NIP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and NIP Group.
Diversification Opportunities for Expedia and NIP Group
Pay attention - limited upside
The 3 months correlation between Expedia and NIP is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and NIP Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIP Group American 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 NIP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIP Group American has no effect on the direction of Expedia i.e., Expedia and NIP Group go up and down completely randomly.
Pair Corralation between Expedia and NIP Group
Given the investment horizon of 90 days Expedia Group is expected to generate 0.25 times more return on investment than NIP Group. However, Expedia Group is 4.0 times less risky than NIP Group. It trades about 0.07 of its potential returns per unit of risk. NIP Group American is currently generating about 0.0 per unit of risk. If you would invest 9,560 in Expedia Group on September 2, 2024 and sell it today you would earn a total of 8,902 from holding Expedia Group or generate 93.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 18.15% |
| Values | Daily Returns |
Expedia Group vs. NIP Group American
Performance |
| Timeline |
| Expedia Group |
| NIP Group American |
Expedia and NIP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and NIP Group
The main advantage of trading using opposite Expedia and NIP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, NIP Group 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 NIP Group will offset losses from the drop in NIP Group's long position.| Expedia vs. Mondee Holdings | Expedia vs. MakeMyTrip Limited | Expedia vs. Tuniu Corp | Expedia vs. TripAdvisor |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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