Correlation Between Able View and Travelzoo

Can any of the company-specific risk be diversified away by investing in both Able View and Travelzoo 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 Able View and Travelzoo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Able View Global and Travelzoo, you can compare the effects of market volatilities on Able View and Travelzoo 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 Able View with a short position of Travelzoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Able View and Travelzoo.

Diversification Opportunities for Able View and Travelzoo

-0.32

Correlation Coefficient

Able View  Travelzoo

Very good diversification

The 3 months correlation between Able and Travelzoo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Able View Global and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo and Able View 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 Able View Global are associated (or correlated) with Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Able View i.e., Able View and Travelzoo go up and down completely randomly.

Pair Corralation between Able View and Travelzoo

Given the investment horizon of 90 days Able View is expected to generate 5.76 times less return on investment than Travelzoo. In addition to that, Able View is 1.69 times more volatile than Travelzoo. It trades about 0.02 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.2 per unit of volatility. If you would invest  871.00  in Travelzoo on October 22, 2024 and sell it today you would earn a total of  1,227  from holding Travelzoo or generate 140.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Able View Global  vs.  Travelzoo

Able View Global

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Able View Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Travelzoo

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Travelzoo are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Travelzoo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Able View and Travelzoo

The main advantage of trading using opposite Able View and Travelzoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Able View position performs unexpectedly, Travelzoo 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 Travelzoo will offset losses from the drop in Travelzoo's long position.

The idea behind Able View Global and Travelzoo 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.