Correlation Between EXPEDIA and Definitive Healthcare

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Can any of the company-specific risk be diversified away by investing in both EXPEDIA and Definitive Healthcare 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 EXPEDIA and Definitive Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXPEDIA GROUP INC and Definitive Healthcare Corp, you can compare the effects of market volatilities on EXPEDIA and Definitive Healthcare 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 EXPEDIA with a short position of Definitive Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXPEDIA and Definitive Healthcare.

Diversification Opportunities for EXPEDIA and Definitive Healthcare

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between EXPEDIA and Definitive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EXPEDIA GROUP INC and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare and EXPEDIA 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 EXPEDIA GROUP INC are associated (or correlated) with Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of EXPEDIA i.e., EXPEDIA and Definitive Healthcare go up and down completely randomly.

Pair Corralation between EXPEDIA and Definitive Healthcare

Assuming the 90 days trading horizon EXPEDIA GROUP INC is expected to generate 0.13 times more return on investment than Definitive Healthcare. However, EXPEDIA GROUP INC is 7.9 times less risky than Definitive Healthcare. It trades about 0.0 of its potential returns per unit of risk. Definitive Healthcare Corp is currently generating about -0.03 per unit of risk. If you would invest  9,834  in EXPEDIA GROUP INC on August 31, 2024 and sell it today you would lose (50.00) from holding EXPEDIA GROUP INC or give up 0.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.93%
ValuesDaily Returns

EXPEDIA GROUP INC  vs.  Definitive Healthcare Corp

 Performance 
       Timeline  
EXPEDIA GROUP INC 

Risk-Adjusted Performance

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Over the last 90 days EXPEDIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPEDIA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Definitive Healthcare 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Definitive Healthcare is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

EXPEDIA and Definitive Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EXPEDIA and Definitive Healthcare

The main advantage of trading using opposite EXPEDIA and Definitive Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXPEDIA position performs unexpectedly, Definitive Healthcare 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 Definitive Healthcare will offset losses from the drop in Definitive Healthcare's long position.
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The idea behind EXPEDIA GROUP INC and Definitive Healthcare Corp 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.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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