Correlation Between Trip Group and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Trip Group 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 Trip Group and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trip Group Limited and Booking Holdings, you can compare the effects of market volatilities on Trip Group 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 Trip Group with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trip Group and Booking Holdings.
Diversification Opportunities for Trip Group and Booking Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trip and Booking is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Trip Group Limited and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Trip Group 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 Trip Group Limited 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 Trip Group i.e., Trip Group and Booking Holdings go up and down completely randomly.
Pair Corralation between Trip Group and Booking Holdings
If you would invest 477,646 in Booking Holdings on September 4, 2024 and sell it today you would earn a total of 44,782 from holding Booking Holdings or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trip Group Limited vs. Booking Holdings
Performance |
| Timeline |
| Trip Group Limited |
| Booking Holdings |
Trip Group and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trip Group and Booking Holdings
The main advantage of trading using opposite Trip Group and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trip Group 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.| Trip Group vs. Booking Holdings | Trip Group vs. TripAdvisor | Trip Group vs. Airbnb Inc | Trip Group vs. Royal Caribbean Cruises |
| Booking Holdings vs. Mondee Holdings | Booking Holdings vs. MakeMyTrip Limited | Booking Holdings vs. TripAdvisor | Booking Holdings vs. Thayer Ventures Acquisition |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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