Correlation Between Airbnb and TravelCenters

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

By analyzing existing cross correlation between Airbnb Inc and TravelCenters Of America, you can compare the effects of market volatilities on Airbnb and TravelCenters 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 Airbnb with a short position of TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbnb and TravelCenters.

Diversification Opportunities for Airbnb and TravelCenters

0.0

Correlation Coefficient

Airbnb  TravelCenters

Pay attention - limited upside

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

Pair Corralation between Airbnb and TravelCenters

If you would invest (100.00) in TravelCenters Of America on December 30, 2024 and sell it today you would earn a total of  100.00  from holding TravelCenters Of America or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Airbnb Inc  vs.  TravelCenters Of America

Airbnb Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airbnb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TravelCenters Of America

Risk-Adjusted Performance

Very Weak

Over the last 90 days TravelCenters Of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TravelCenters is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Airbnb and TravelCenters

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

The idea behind Airbnb Inc and TravelCenters Of America 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.