Correlation Between EXPEDIA and Joint Stock

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

By analyzing existing cross correlation between EXPEDIA GROUP INC and Joint Stock, you can compare the effects of market volatilities on EXPEDIA and Joint Stock 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 EXPEDIA with a short position of Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXPEDIA and Joint Stock.

Diversification Opportunities for EXPEDIA and Joint Stock

-0.04

Correlation Coefficient

EXPEDIA  Joint Stock

Good diversification

The 3 months correlation between EXPEDIA and Joint is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding EXPEDIA GROUP INC and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock and EXPEDIA 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 EXPEDIA GROUP INC are associated (or correlated) with Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of EXPEDIA i.e., EXPEDIA and Joint Stock go up and down completely randomly.

Pair Corralation between EXPEDIA and Joint Stock

Assuming the 90 days trading horizon EXPEDIA GROUP INC is expected to generate 0.27 times more return on investment than Joint Stock. However, EXPEDIA GROUP INC is 3.77 times less risky than Joint Stock. It trades about -0.17 of its potential returns per unit of risk. Joint Stock is currently generating about -0.05 per unit of risk. If you would invest  9,146  in EXPEDIA GROUP INC on September 16, 2024 and sell it today you would lose (767.00) from holding EXPEDIA GROUP INC or give up 8.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

EXPEDIA GROUP INC  vs.  Joint Stock

EXPEDIA GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Joint Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with EXPEDIA and Joint Stock

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

The idea behind EXPEDIA GROUP INC and Joint Stock 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.