Correlation Between Tyson Foods and Expedia
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Expedia Group, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Expedia.
Diversification Opportunities for Tyson Foods and Expedia
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tyson and Expedia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Expedia go up and down completely randomly.
Pair Corralation between Tyson Foods and Expedia
Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the Expedia. But the stock apears to be less risky and, when comparing its historical volatility, Tyson Foods is 2.46 times less risky than Expedia. The stock trades about -0.01 of its potential returns per unit of risk. The Expedia Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 57,761 in Expedia Group on November 30, 2024 and sell it today you would lose (664.00) from holding Expedia Group or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.35% |
| Values | Daily Returns |
Tyson Foods vs. Expedia Group
Performance |
| Timeline |
| Tyson Foods |
| Expedia Group |
Tyson Foods and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Expedia
The main advantage of trading using opposite Tyson Foods and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Marfrig Global Foods | Tyson Foods vs. Check Point Software | Tyson Foods vs. Bio Techne | Tyson Foods vs. Technos SA |
| Expedia vs. Monster Beverage | Expedia vs. Agilent Technologies | Expedia vs. Uber Technologies | Expedia vs. Guidewire Software, |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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