Correlation Between Amadeus IT and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and Amadeus IT 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 Amadeus IT and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and Amadeus IT Holding, you can compare the effects of market volatilities on Amadeus IT and Amadeus IT 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 Amadeus IT with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Amadeus IT.
Diversification Opportunities for Amadeus IT and Amadeus IT
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amadeus and Amadeus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and Amadeus IT Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Holding and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Holding has no effect on the direction of Amadeus IT i.e., Amadeus IT and Amadeus IT go up and down completely randomly.
Pair Corralation between Amadeus IT and Amadeus IT
Assuming the 90 days horizon Amadeus IT Group is expected to generate 1.64 times more return on investment than Amadeus IT. However, Amadeus IT is 1.64 times more volatile than Amadeus IT Holding. It trades about 0.08 of its potential returns per unit of risk. Amadeus IT Holding is currently generating about 0.13 per unit of risk. If you would invest 6,260 in Amadeus IT Group on February 4, 2024 and sell it today you would earn a total of 235.00 from holding Amadeus IT Group or generate 3.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amadeus IT Group vs. Amadeus IT Holding
Performance |
Timeline |
Amadeus IT Group |
Amadeus IT Holding |
Amadeus IT and Amadeus IT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amadeus IT and Amadeus IT
The main advantage of trading using opposite Amadeus IT and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.Amadeus IT vs. Booking Holdings | Amadeus IT vs. TripAdvisor | Amadeus IT vs. AirbnbInc | Amadeus IT vs. Royal Caribbean Cruises |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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