Correlation Between Groupon and Liberty Tripadvisor
Can any of the company-specific risk be diversified away by investing in both Groupon and Liberty Tripadvisor 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 Groupon and Liberty Tripadvisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupon and Liberty Tripadvisor Holdings, you can compare the effects of market volatilities on Groupon and Liberty Tripadvisor 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 Groupon with a short position of Liberty Tripadvisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupon and Liberty Tripadvisor.
Diversification Opportunities for Groupon and Liberty Tripadvisor
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Groupon and Liberty is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Groupon and Liberty Tripadvisor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Tripadvisor and Groupon 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 Groupon are associated (or correlated) with Liberty Tripadvisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Tripadvisor has no effect on the direction of Groupon i.e., Groupon and Liberty Tripadvisor go up and down completely randomly.
Pair Corralation between Groupon and Liberty Tripadvisor
If you would invest 3,763 in Liberty Tripadvisor Holdings on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Liberty Tripadvisor Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Groupon vs. Liberty Tripadvisor Holdings
Performance |
| Timeline |
| Groupon |
| Liberty Tripadvisor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Groupon and Liberty Tripadvisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupon and Liberty Tripadvisor
The main advantage of trading using opposite Groupon and Liberty Tripadvisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupon position performs unexpectedly, Liberty Tripadvisor 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 Liberty Tripadvisor will offset losses from the drop in Liberty Tripadvisor's long position.The idea behind Groupon and Liberty Tripadvisor Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Liberty Tripadvisor vs. Comscore | Liberty Tripadvisor vs. Cheetah Mobile | Liberty Tripadvisor vs. PropertyGuru Group | Liberty Tripadvisor vs. EverQuote Class A |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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