Correlation Between Booking Holdings and Trigano SA
Can any of the company-specific risk be diversified away by investing in both Booking Holdings and Trigano SA 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 Booking Holdings and Trigano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and Trigano SA, you can compare the effects of market volatilities on Booking Holdings and Trigano SA 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 Booking Holdings with a short position of Trigano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and Trigano SA.
Diversification Opportunities for Booking Holdings and Trigano SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Booking and Trigano is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Booking Holdings 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 Booking Holdings are associated (or correlated) with Trigano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigano SA has no effect on the direction of Booking Holdings i.e., Booking Holdings and Trigano SA go up and down completely randomly.
Pair Corralation between Booking Holdings and Trigano SA
Assuming the 90 days trading horizon Booking Holdings is expected to generate 1.31 times more return on investment than Trigano SA. However, Booking Holdings is 1.31 times more volatile than Trigano SA. It trades about 0.53 of its potential returns per unit of risk. Trigano SA is currently generating about -0.09 per unit of risk. If you would invest 402,400 in Booking Holdings on August 28, 2024 and sell it today you would earn a total of 92,200 from holding Booking Holdings or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Booking Holdings vs. Trigano SA
Performance |
| Timeline |
| Booking Holdings |
| Trigano SA |
Booking Holdings and Trigano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking Holdings and Trigano SA
The main advantage of trading using opposite Booking Holdings and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings position performs unexpectedly, Trigano SA 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 Trigano SA will offset losses from the drop in Trigano SA's long position.| Booking Holdings vs. BRIT AMER TOBACCO | Booking Holdings vs. SOLSTAD OFFSHORE NK | Booking Holdings vs. Sqs Software Quality | Booking Holdings vs. NORTHEAST UTILITIES |
| Trigano SA vs. OFFICE DEPOT | Trigano SA vs. MINCO SILVER | Trigano SA vs. MTI WIRELESS EDGE | Trigano SA vs. Harmony Gold Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |