Correlation Between Trip Group and Expedia

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

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

Diversification Opportunities for Trip Group and Expedia

0.39

Correlation Coefficient

Trip Group  Expedia

Weak diversification

The 3 months correlation between Trip and Expedia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trip Group Limited and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Trip Group 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 Trip Group Limited are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Trip Group i.e., Trip Group and Expedia go up and down completely randomly.

Pair Corralation between Trip Group and Expedia

Assuming the 90 days horizon Trip Group is expected to generate 3.39 times less return on investment than Expedia. But when comparing it to its historical volatility, Trip Group Limited is 1.09 times less risky than Expedia. It trades about 0.04 of its potential returns per unit of risk. Expedia Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  12,643  in Expedia Group on April 23, 2025 and sell it today you would earn a total of  2,785  from holding Expedia Group or generate 22.03% return on investment over 90 days.

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

Trip Group Limited  vs.  Expedia Group

Trip Group Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trip Group Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Trip Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Expedia Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Expedia Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Expedia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trip Group and Expedia

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

The idea behind Trip Group Limited and Expedia Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.