Correlation Between Despegar Corp and Mondee Holdings
Can any of the company-specific risk be diversified away by investing in both Despegar Corp and Mondee 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 Despegar Corp and Mondee Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Despegar Corp and Mondee Holdings, you can compare the effects of market volatilities on Despegar Corp and Mondee 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 Despegar Corp with a short position of Mondee Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Despegar Corp and Mondee Holdings.
Diversification Opportunities for Despegar Corp and Mondee Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Despegar and Mondee is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Despegar Corp and Mondee Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondee Holdings and Despegar Corp 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 Despegar Corp are associated (or correlated) with Mondee Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondee Holdings has no effect on the direction of Despegar Corp i.e., Despegar Corp and Mondee Holdings go up and down completely randomly.
Pair Corralation between Despegar Corp and Mondee Holdings
Given the investment horizon of 90 days Despegar Corp is expected to generate 3.61 times less return on investment than Mondee Holdings. But when comparing it to its historical volatility, Despegar Corp is 1.71 times less risky than Mondee Holdings. It trades about 0.08 of its potential returns per unit of risk. Mondee Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 209.00 in Mondee Holdings on February 5, 2024 and sell it today you would earn a total of 33.00 from holding Mondee Holdings or generate 15.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Despegar Corp vs. Mondee Holdings
Performance |
Timeline |
Despegar Corp |
Mondee Holdings |
Despegar Corp and Mondee Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Despegar Corp and Mondee Holdings
The main advantage of trading using opposite Despegar Corp and Mondee Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Despegar Corp position performs unexpectedly, Mondee 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 Mondee Holdings will offset losses from the drop in Mondee Holdings' long position.Despegar Corp vs. TUI AG | Despegar Corp vs. Inspirato | Despegar Corp vs. TripAdvisor | Despegar Corp vs. Travel Leisure Co |
Mondee Holdings vs. TUI AG | Mondee Holdings vs. Inspirato | Mondee Holdings vs. TripAdvisor | Mondee Holdings vs. Travel Leisure Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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