Correlation Between Oriental Land and Expedia
Can any of the company-specific risk be diversified away by investing in both Oriental Land and Expedia 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 Oriental Land and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Land Co and Expedia Group, you can compare the effects of market volatilities on Oriental Land and Expedia 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 Oriental Land with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Land and Expedia.
Diversification Opportunities for Oriental Land and Expedia
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oriental and Expedia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Oriental Land 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 Oriental Land Co are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Oriental Land i.e., Oriental Land and Expedia go up and down completely randomly.
Pair Corralation between Oriental Land and Expedia
Assuming the 90 days horizon Oriental Land is expected to generate 1.2 times less return on investment than Expedia. In addition to that, Oriental Land is 2.57 times more volatile than Expedia Group. It trades about 0.08 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.25 per unit of volatility. If you would invest 12,542 in Expedia Group on August 28, 2024 and sell it today you would earn a total of 5,016 from holding Expedia Group or generate 39.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Land Co vs. Expedia Group
Performance |
| Timeline |
| Oriental Land |
| Expedia Group |
Oriental Land and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Land and Expedia
The main advantage of trading using opposite Oriental Land and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Land position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.| Oriental Land vs. SCOTT TECHNOLOGY | Oriental Land vs. X FAB Silicon Foundries | Oriental Land vs. Chunghwa Telecom Co | Oriental Land vs. Vishay Intertechnology |
| Expedia vs. Playtech plc | Expedia vs. Molson Coors Beverage | Expedia vs. PLAYTIKA HOLDING DL 01 | Expedia vs. JD SPORTS FASH |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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