Correlation Between Trivago NV and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Trivago NV and Auto Trader 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 Trivago NV and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trivago NV and Auto Trader Group, you can compare the effects of market volatilities on Trivago NV and Auto Trader 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 Trivago NV with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trivago NV and Auto Trader.
Diversification Opportunities for Trivago NV and Auto Trader
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trivago and Auto is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Trivago NV and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Trivago NV 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 Trivago NV are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Trivago NV i.e., Trivago NV and Auto Trader go up and down completely randomly.
Pair Corralation between Trivago NV and Auto Trader
Given the investment horizon of 90 days Trivago NV is expected to generate 1.75 times more return on investment than Auto Trader. However, Trivago NV is 1.75 times more volatile than Auto Trader Group. It trades about 0.34 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.17 per unit of risk. If you would invest 165.00 in Trivago NV on August 30, 2024 and sell it today you would earn a total of 53.00 from holding Trivago NV or generate 32.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trivago NV vs. Auto Trader Group
Performance |
| Timeline |
| Trivago NV |
| Auto Trader Group |
Trivago NV and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trivago NV and Auto Trader
The main advantage of trading using opposite Trivago NV and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trivago NV position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Trivago NV vs. Upexi Inc | Trivago NV vs. Cheetah Mobile | Trivago NV vs. Comscore | Trivago NV vs. PropertyGuru Group |
| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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