Correlation Between Target Hospitality and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Target Hospitality and Booking 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 Target Hospitality and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Hospitality Corp and Booking Holdings, you can compare the effects of market volatilities on Target Hospitality and Booking 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 Target Hospitality with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Hospitality and Booking Holdings.
Diversification Opportunities for Target Hospitality and Booking Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Target and Booking is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Target Hospitality Corp and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Target Hospitality 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 Target Hospitality Corp are associated (or correlated) with Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Target Hospitality i.e., Target Hospitality and Booking Holdings go up and down completely randomly.
Pair Corralation between Target Hospitality and Booking Holdings
Allowing for the 90-day total investment horizon Target Hospitality Corp is expected to under-perform the Booking Holdings. In addition to that, Target Hospitality is 2.14 times more volatile than Booking Holdings. It trades about -0.11 of its total potential returns per unit of risk. Booking Holdings is currently generating about -0.09 per unit of volatility. If you would invest 552,249 in Booking Holdings on August 18, 2025 and sell it today you would lose (47,448) from holding Booking Holdings or give up 8.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target Hospitality Corp vs. Booking Holdings
Performance |
| Timeline |
| Target Hospitality Corp |
| Booking Holdings |
Target Hospitality and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Hospitality and Booking Holdings
The main advantage of trading using opposite Target Hospitality and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Hospitality position performs unexpectedly, Booking 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Target Hospitality vs. Nordic American Tankers | Target Hospitality vs. Bowman Consulting Group | Target Hospitality vs. Great Lakes Dredge | Target Hospitality vs. Apogee Enterprises |
| Booking Holdings vs. The TJX Companies | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. PDD Holdings | Booking Holdings vs. Lowes Companies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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