Correlation Between Expedia and Panther Metals

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

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

Diversification Opportunities for Expedia and Panther Metals

-0.62

Correlation Coefficient

Expedia  Panther Metals

Excellent diversification

The 3 months correlation between Expedia and Panther is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Expedia i.e., Expedia and Panther Metals go up and down completely randomly.

Pair Corralation between Expedia and Panther Metals

Assuming the 90 days trading horizon Expedia is expected to generate 4.28 times less return on investment than Panther Metals. But when comparing it to its historical volatility, Expedia Group is 2.1 times less risky than Panther Metals. It trades about 0.08 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  9,000  in Panther Metals PLC on May 3, 2024 and sell it today you would earn a total of  1,250  from holding Panther Metals PLC or generate 13.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Expedia Group  vs.  Panther Metals PLC

Expedia Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Expedia Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Expedia may actually be approaching a critical reversion point that can send shares even higher in September 2024.

Panther Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panther Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Expedia and Panther Metals

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

The idea behind Expedia Group and Panther Metals PLC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.