Correlation Between Extended Stay and Expedia
Can any of the company-specific risk be diversified away by investing in both Extended Stay 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 Extended Stay and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Stay America and Expedia Group, you can compare the effects of market volatilities on Extended Stay 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 Extended Stay with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Stay and Expedia.
Diversification Opportunities for Extended Stay and Expedia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Extended and Expedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Extended Stay America and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Extended Stay 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 Extended Stay America 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 Extended Stay i.e., Extended Stay and Expedia go up and down completely randomly.
Pair Corralation between Extended Stay and Expedia
If you would invest 13,553 in Expedia Group on December 30, 2023 and sell it today you would earn a total of 222.00 from holding Expedia Group or generate 1.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Extended Stay America vs. Expedia Group
Performance |
Timeline |
Extended Stay America |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Expedia Group |
Extended Stay and Expedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Extended Stay and Expedia
The main advantage of trading using opposite Extended Stay and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Stay 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.Extended Stay vs. Weyco Group | Extended Stay vs. Bausch Lomb Corp | Extended Stay vs. Biglari Holdings | Extended Stay vs. Acco Brands |
Expedia vs. Mondee Holdings | Expedia vs. Travel Leisure Co | Expedia vs. Yatra Online | Expedia vs. Inspirato |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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