Correlation Between EDreams Odigeo and Indra A

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

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

Diversification Opportunities for EDreams Odigeo and Indra A

0.59

Correlation Coefficient

EDreams Odigeo  Indra A

Very weak diversification

The 3 months correlation between EDreams and Indra is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding eDreams Odigeo SA and Indra A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indra A and EDreams Odigeo 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 eDreams Odigeo SA are associated (or correlated) with Indra A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indra A has no effect on the direction of EDreams Odigeo i.e., EDreams Odigeo and Indra A go up and down completely randomly.

Pair Corralation between EDreams Odigeo and Indra A

Assuming the 90 days trading horizon EDreams Odigeo is expected to generate 2.39 times less return on investment than Indra A. But when comparing it to its historical volatility, eDreams Odigeo SA is 1.17 times less risky than Indra A. It trades about 0.11 of its potential returns per unit of risk. Indra A is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,676  in Indra A on April 25, 2025 and sell it today you would earn a total of  1,052  from holding Indra A or generate 39.31% return on investment over 90 days.

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

eDreams Odigeo SA  vs.  Indra A

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.

Indra A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indra A are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Indra A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EDreams Odigeo and Indra A

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

The idea behind eDreams Odigeo SA and Indra A 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.