Correlation Between Cox ABG and EDreams Odigeo

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

By analyzing existing cross correlation between Cox ABG Group and eDreams Odigeo SA, you can compare the effects of market volatilities on Cox ABG and EDreams Odigeo 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 Cox ABG with a short position of EDreams Odigeo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cox ABG and EDreams Odigeo.

Diversification Opportunities for Cox ABG and EDreams Odigeo

0.48

Correlation Coefficient

Cox ABG  EDreams Odigeo

Very weak diversification

The 3 months correlation between Cox and EDreams is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cox ABG Group and eDreams Odigeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eDreams Odigeo SA and Cox ABG 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 Cox ABG Group are associated (or correlated) with EDreams Odigeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eDreams Odigeo SA has no effect on the direction of Cox ABG i.e., Cox ABG and EDreams Odigeo go up and down completely randomly.

Pair Corralation between Cox ABG and EDreams Odigeo

Assuming the 90 days trading horizon Cox ABG Group is expected to generate 1.28 times more return on investment than EDreams Odigeo. However, Cox ABG is 1.28 times more volatile than eDreams Odigeo SA. It trades about 0.16 of its potential returns per unit of risk. eDreams Odigeo SA is currently generating about 0.11 per unit of risk. If you would invest  860.00  in Cox ABG Group on April 25, 2025 and sell it today you would earn a total of  240.00  from holding Cox ABG Group or generate 27.91% return on investment over 90 days.

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

Cox ABG Group  vs.  eDreams Odigeo SA

Cox ABG Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cox ABG Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Cox ABG exhibited solid returns over the last few months and may actually be approaching a breakup point.

eDreams Odigeo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eDreams Odigeo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EDreams Odigeo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cox ABG and EDreams Odigeo

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

The idea behind Cox ABG Group and eDreams Odigeo SA 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.