Correlation Between HR Block and Airbnb
Can any of the company-specific risk be diversified away by investing in both HR Block and Airbnb 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 HR Block and Airbnb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HR Block and Airbnb Inc, you can compare the effects of market volatilities on HR Block and Airbnb 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 HR Block with a short position of Airbnb. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Block and Airbnb.
Diversification Opportunities for HR Block and Airbnb
Excellent diversification
The 3 months correlation between HRB and Airbnb is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding HR Block and Airbnb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbnb Inc and HR Block 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 HR Block are associated (or correlated) with Airbnb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbnb Inc has no effect on the direction of HR Block i.e., HR Block and Airbnb go up and down completely randomly.
Pair Corralation between HR Block and Airbnb
Considering the 90-day investment horizon HR Block is expected to generate 11.79 times less return on investment than Airbnb. In addition to that, HR Block is 1.03 times more volatile than Airbnb Inc. It trades about 0.01 of its total potential returns per unit of risk. Airbnb Inc is currently generating about 0.08 per unit of volatility. If you would invest 13,578 in Airbnb Inc on August 27, 2024 and sell it today you would earn a total of 515.00 from holding Airbnb Inc or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HR Block vs. Airbnb Inc
Performance |
| Timeline |
| HR Block |
| Airbnb Inc |
HR Block and Airbnb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HR Block and Airbnb
The main advantage of trading using opposite HR Block and Airbnb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HR Block position performs unexpectedly, Airbnb 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 Airbnb will offset losses from the drop in Airbnb's long position.| HR Block vs. Bright Horizons Family | HR Block vs. Service International | HR Block vs. Carriage Services | HR Block vs. Mister Car Wash |
| Airbnb vs. Norwegian Cruise Line | Airbnb vs. Royal Caribbean Cruises | Airbnb vs. Expedia Group | Airbnb vs. Booking Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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