Correlation Between Expedia and NextPlay Technologies

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

By analyzing existing cross correlation between Expedia Group and NextPlay Technologies, you can compare the effects of market volatilities on Expedia and NextPlay Technologies 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 NextPlay Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and NextPlay Technologies.

Diversification Opportunities for Expedia and NextPlay Technologies

0.0

Correlation Coefficient

Expedia  NextPlay Technologies

Pay attention - limited upside

The 3 months correlation between Expedia and NextPlay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and NextPlay Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlay Technologies 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 are associated (or correlated) with NextPlay Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlay Technologies has no effect on the direction of Expedia i.e., Expedia and NextPlay Technologies go up and down completely randomly.

Pair Corralation between Expedia and NextPlay Technologies

If you would invest  9,419  in Expedia Group on January 17, 2024 and sell it today you would earn a total of  3,446  from holding Expedia Group or generate 36.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Expedia Group  vs.  NextPlay Technologies

Expedia Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expedia Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

NextPlay Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextPlay Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, NextPlay Technologies is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Expedia and NextPlay Technologies

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

The idea behind Expedia Group and NextPlay Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..