Correlation Between Teladoc Health and Expedia
Can any of the company-specific risk be diversified away by investing in both Teladoc Health 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 Teladoc Health and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladoc Health and Expedia Group, you can compare the effects of market volatilities on Teladoc Health 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 Teladoc Health with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and Expedia.
Diversification Opportunities for Teladoc Health and Expedia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Teladoc and Expedia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Teladoc Health 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 Teladoc Health 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 Teladoc Health i.e., Teladoc Health and Expedia go up and down completely randomly.
Pair Corralation between Teladoc Health and Expedia
Assuming the 90 days trading horizon Teladoc Health is expected to generate 1.97 times less return on investment than Expedia. In addition to that, Teladoc Health is 1.92 times more volatile than Expedia Group. It trades about 0.05 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.18 per unit of volatility. If you would invest 33,238 in Expedia Group on September 14, 2024 and sell it today you would earn a total of 22,202 from holding Expedia Group or generate 66.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladoc Health vs. Expedia Group
Performance |
| Timeline |
| Teladoc Health |
| Expedia Group |
Teladoc Health and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladoc Health and Expedia
The main advantage of trading using opposite Teladoc Health and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health 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.| Teladoc Health vs. Fundo Investimento Imobiliario | Teladoc Health vs. LESTE FDO INV | Teladoc Health vs. Fras le SA | Teladoc Health vs. Western Digital |
| Expedia vs. Teladoc Health | Expedia vs. Uber Technologies | Expedia vs. GX AI TECH | Expedia vs. BIONTECH SE DRN |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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