Correlation Between Home Inns and Expedia
Can any of the company-specific risk be diversified away by investing in both Home Inns and Expedia 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 Home Inns and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Inns Hotels and Expedia Group, you can compare the effects of market volatilities on Home Inns and Expedia 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 Home Inns with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Inns and Expedia.
Diversification Opportunities for Home Inns and Expedia
Pay attention - limited upside
The 3 months correlation between Home and Expedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Inns Hotels and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Home Inns 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 Home Inns Hotels are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Home Inns i.e., Home Inns and Expedia go up and down completely randomly.
Pair Corralation between Home Inns and Expedia
If you would invest (100.00) in Home Inns Hotels on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Home Inns Hotels 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 |
Home Inns Hotels vs. Expedia Group
Performance |
| Timeline |
| Home Inns Hotels |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Expedia Group |
Home Inns and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Inns and Expedia
The main advantage of trading using opposite Home Inns and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Inns position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.| Home Inns vs. Grupo Televisa SAB | Home Inns vs. Compania Cervecerias Unidas | Home Inns vs. Constellation Brands Class | Home Inns vs. Oatly Group AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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