Correlation Between Transport International and EBay
Can any of the company-specific risk be diversified away by investing in both Transport International and EBay 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 Transport International and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and eBay Inc, you can compare the effects of market volatilities on Transport International and EBay 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 Transport International with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and EBay.
Diversification Opportunities for Transport International and EBay
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transport and EBay is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Transport International 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 Transport International Holdings are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Transport International i.e., Transport International and EBay go up and down completely randomly.
Pair Corralation between Transport International and EBay
Assuming the 90 days horizon Transport International Holdings is expected to generate 3.36 times more return on investment than EBay. However, Transport International is 3.36 times more volatile than eBay Inc. It trades about 0.06 of its potential returns per unit of risk. eBay Inc is currently generating about 0.14 per unit of risk. If you would invest 56.00 in Transport International Holdings on September 5, 2024 and sell it today you would earn a total of 39.00 from holding Transport International Holdings or generate 69.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.41% |
| Values | Daily Returns |
Transport International Holdin vs. eBay Inc
Performance |
| Timeline |
| Transport International |
| eBay Inc |
Transport International and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and EBay
The main advantage of trading using opposite Transport International and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| Transport International vs. Superior Plus Corp | Transport International vs. NMI Holdings | Transport International vs. Origin Agritech | Transport International vs. SIVERS SEMICONDUCTORS AB |
| EBay vs. BURLINGTON STORES | EBay vs. Strategic Investments AS | EBay vs. Virtus Investment Partners | EBay vs. Burlington Stores |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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