Correlation Between Admiral Group and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Admiral Group and Booking 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 Admiral Group and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Admiral Group plc and Booking Holdings, you can compare the effects of market volatilities on Admiral Group and Booking 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 Admiral Group with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Admiral Group and Booking Holdings.
Diversification Opportunities for Admiral Group and Booking Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Admiral and Booking is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Admiral Group plc and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Admiral Group 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 Admiral Group plc are associated (or correlated) with Booking Holdings. 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 has no effect on the direction of Admiral Group i.e., Admiral Group and Booking Holdings go up and down completely randomly.
Pair Corralation between Admiral Group and Booking Holdings
If you would invest 3,408 in Admiral Group plc on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Admiral Group plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Admiral Group plc vs. Booking Holdings
Performance |
| Timeline |
| Admiral Group plc |
| Booking Holdings |
Admiral Group and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Admiral Group and Booking Holdings
The main advantage of trading using opposite Admiral Group and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Admiral Group position performs unexpectedly, Booking 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Admiral Group vs. Root Inc | Admiral Group vs. Walt Disney | Admiral Group vs. Coupang LLC | Admiral Group vs. Geron |
Check out your portfolio center.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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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