Correlation Between TRAVEL + and Gaming
Can any of the company-specific risk be diversified away by investing in both TRAVEL + and Gaming 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 TRAVEL + and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Gaming and Leisure, you can compare the effects of market volatilities on TRAVEL + and Gaming 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 TRAVEL + with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Gaming.
Diversification Opportunities for TRAVEL + and Gaming
Very weak diversification
The 3 months correlation between TRAVEL and Gaming is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and TRAVEL + 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 TRAVEL LEISURE DL 01 are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of TRAVEL + i.e., TRAVEL + and Gaming go up and down completely randomly.
Pair Corralation between TRAVEL + and Gaming
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.77 times more return on investment than Gaming. However, TRAVEL LEISURE DL 01 is 1.29 times less risky than Gaming. It trades about 0.25 of its potential returns per unit of risk. Gaming and Leisure is currently generating about -0.01 per unit of risk. If you would invest 4,840 in TRAVEL LEISURE DL 01 on November 4, 2024 and sell it today you would earn a total of 360.00 from holding TRAVEL LEISURE DL 01 or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. Gaming and Leisure
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| Gaming and Leisure |
TRAVEL + and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and Gaming
The main advantage of trading using opposite TRAVEL + and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| TRAVEL + vs. SQUIRREL MEDIA SA | TRAVEL + vs. Live Nation Entertainment | TRAVEL + vs. PENN Entertainment | TRAVEL + vs. Universal Entertainment |
| Gaming vs. JSC Halyk bank | Gaming vs. Highlight Communications AG | Gaming vs. Ribbon Communications | Gaming vs. Verizon Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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