Correlation Between Travel Leisure and Mondee Holdings

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

By analyzing existing cross correlation between Travel Leisure Co and Mondee Holdings, you can compare the effects of market volatilities on Travel Leisure and Mondee Holdings 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 Leisure with a short position of Mondee Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travel Leisure and Mondee Holdings.

Diversification Opportunities for Travel Leisure and Mondee Holdings

0.0

Correlation Coefficient

Travel Leisure  Mondee Holdings

Pay attention - limited upside

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

Pair Corralation between Travel Leisure and Mondee Holdings

If you would invest (100.00) in Mondee Holdings on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Mondee Holdings 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

Travel Leisure Co  vs.  Mondee Holdings

Travel Leisure

Risk-Adjusted Performance

Very Weak

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

Mondee Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Mondee Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Travel Leisure and Mondee Holdings

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

The idea behind Travel Leisure Co and Mondee Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.