Correlation Between Sabre and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Sabre and Booking Holdings 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 Sabre and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre and Booking Holdings, you can compare the effects of market volatilities on Sabre and Booking Holdings 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 Sabre with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre and Booking Holdings.
Diversification Opportunities for Sabre and Booking Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabre and Booking is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sabre and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Sabre 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 Sabre are associated (or correlated) with Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Sabre i.e., Sabre and Booking Holdings go up and down completely randomly.
Pair Corralation between Sabre and Booking Holdings
If you would invest 446,393 in Booking Holdings on August 31, 2024 and sell it today you would earn a total of 75,922 from holding Booking Holdings or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Sabre vs. Booking Holdings
Performance |
| Timeline |
| Sabre |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Booking Holdings |
Sabre and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre and Booking Holdings
The main advantage of trading using opposite Sabre and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.The idea behind Sabre and Booking Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Booking Holdings vs. TripAdvisor | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. Royal Caribbean Cruises | Booking Holdings vs. Norwegian Cruise Line |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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