Correlation Between The9 and Travelzoo
Can any of the company-specific risk be diversified away by investing in both The9 and Travelzoo 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 The9 and Travelzoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The9 Ltd ADR and Travelzoo, you can compare the effects of market volatilities on The9 and Travelzoo 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 The9 with a short position of Travelzoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of The9 and Travelzoo.
Diversification Opportunities for The9 and Travelzoo
Poor diversification
The 3 months correlation between The9 and Travelzoo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The9 Ltd ADR and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo and The9 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 The9 Ltd ADR are associated (or correlated) with Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of The9 i.e., The9 and Travelzoo go up and down completely randomly.
Pair Corralation between The9 and Travelzoo
Given the investment horizon of 90 days The9 is expected to generate 1.12 times less return on investment than Travelzoo. In addition to that, The9 is 1.76 times more volatile than Travelzoo. It trades about 0.05 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.1 per unit of volatility. If you would invest 1,015 in Travelzoo on August 26, 2024 and sell it today you would earn a total of 967.00 from holding Travelzoo or generate 95.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
The9 Ltd ADR vs. Travelzoo
Performance |
Timeline |
The9 Ltd ADR |
Travelzoo |
The9 and Travelzoo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with The9 and Travelzoo
The main advantage of trading using opposite The9 and Travelzoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The9 position performs unexpectedly, Travelzoo 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 Travelzoo will offset losses from the drop in Travelzoo's long position.The9 vs. Atari SA | The9 vs. Victory Square Technologies | The9 vs. Motorsport Gaming Us | The9 vs. Alpha Esports Tech |
Travelzoo vs. Dmc Global | Travelzoo vs. Air T Inc | Travelzoo vs. Deckers Outdoor | Travelzoo vs. Sonida Senior Living |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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