Correlation Between Ultra Short-term and BOOKING

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

By analyzing existing cross correlation between Ultra Short Term Bond and BOOKING HOLDINGS INC, you can compare the effects of market volatilities on Ultra Short-term and BOOKING 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 Ultra Short-term with a short position of BOOKING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Short-term and BOOKING.

Diversification Opportunities for Ultra Short-term and BOOKING

0.0

Correlation Coefficient

Ultra Short-term  BOOKING

Pay attention - limited upside

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

Pair Corralation between Ultra Short-term and BOOKING

If you would invest (100.00) in Ultra Short Term Bond on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Ultra Short Term Bond 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

Ultra Short Term Bond  vs.  BOOKING HOLDINGS INC

Ultra Short Term

Risk-Adjusted Performance

Good

Over the last 90 days Ultra Short Term Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ultra Short-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BOOKING HOLDINGS INC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ultra Short-term and BOOKING

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

The idea behind Ultra Short Term Bond and BOOKING HOLDINGS INC 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.