Correlation Between Flight Centre and TRADEDOUBLER
Can any of the company-specific risk be diversified away by investing in both Flight Centre and TRADEDOUBLER 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 Flight Centre and TRADEDOUBLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flight Centre Travel and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on Flight Centre and TRADEDOUBLER 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 Flight Centre with a short position of TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flight Centre and TRADEDOUBLER.
Diversification Opportunities for Flight Centre and TRADEDOUBLER
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flight and TRADEDOUBLER is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Flight Centre Travel and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Flight Centre 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 Flight Centre Travel are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Flight Centre i.e., Flight Centre and TRADEDOUBLER go up and down completely randomly.
Pair Corralation between Flight Centre and TRADEDOUBLER
Assuming the 90 days horizon Flight Centre is expected to generate 3.88 times less return on investment than TRADEDOUBLER. But when comparing it to its historical volatility, Flight Centre Travel is 1.88 times less risky than TRADEDOUBLER. It trades about 0.01 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 42.00 in TRADEDOUBLER AB SK on November 28, 2024 and sell it today you would earn a total of 1.00 from holding TRADEDOUBLER AB SK or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Flight Centre Travel vs. TRADEDOUBLER AB SK
Performance |
| Timeline |
| Flight Centre Travel |
| TRADEDOUBLER AB SK |
Flight Centre and TRADEDOUBLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flight Centre and TRADEDOUBLER
The main advantage of trading using opposite Flight Centre and TRADEDOUBLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flight Centre position performs unexpectedly, TRADEDOUBLER 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 TRADEDOUBLER will offset losses from the drop in TRADEDOUBLER's long position.| Flight Centre vs. MELIA HOTELS | Flight Centre vs. Meli Hotels International | Flight Centre vs. Sinopec Shanghai Petrochemical | Flight Centre vs. MHP Hotel AG |
| TRADEDOUBLER vs. STRAYER EDUCATION | TRADEDOUBLER vs. IDP EDUCATION LTD | TRADEDOUBLER vs. Xinhua Winshare Publishing | TRADEDOUBLER vs. Platinum Investment Management |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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