Correlation Between TripAdvisor and Contextlogic
Can any of the company-specific risk be diversified away by investing in both TripAdvisor and Contextlogic 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 TripAdvisor and Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TripAdvisor and Contextlogic, you can compare the effects of market volatilities on TripAdvisor and Contextlogic 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 TripAdvisor with a short position of Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TripAdvisor and Contextlogic.
Diversification Opportunities for TripAdvisor and Contextlogic
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TripAdvisor and Contextlogic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TripAdvisor and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic and TripAdvisor 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 TripAdvisor are associated (or correlated) with Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of TripAdvisor i.e., TripAdvisor and Contextlogic go up and down completely randomly.
Pair Corralation between TripAdvisor and Contextlogic
Given the investment horizon of 90 days TripAdvisor is expected to generate 1.25 times more return on investment than Contextlogic. However, TripAdvisor is 1.25 times more volatile than Contextlogic. It trades about 0.16 of its potential returns per unit of risk. Contextlogic is currently generating about 0.09 per unit of risk. If you would invest 1,169 in TripAdvisor on April 4, 2025 and sell it today you would earn a total of 581.00 from holding TripAdvisor or generate 49.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.1% |
| Values | Daily Returns |
TripAdvisor vs. Contextlogic
Performance |
| Timeline |
| TripAdvisor |
| Contextlogic |
TripAdvisor and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TripAdvisor and Contextlogic
The main advantage of trading using opposite TripAdvisor and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TripAdvisor position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.| TripAdvisor vs. Academy Sports Outdoors | TripAdvisor vs. Ryanair Holdings PLC | TripAdvisor vs. Apogee Enterprises | TripAdvisor vs. Sun Country Airlines |
| Contextlogic vs. BRP Inc | Contextlogic vs. Hawkins | Contextlogic vs. Visteon Corp | Contextlogic vs. Gentex |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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