Correlation Between BRF SA and Expedia

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

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

Diversification Opportunities for BRF SA and Expedia

0.26

Correlation Coefficient

BRF SA  Expedia

Modest diversification

The 3 months correlation between BRF and Expedia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA ADR and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and BRF SA 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 BRF SA ADR 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 BRF SA i.e., BRF SA and Expedia go up and down completely randomly.

Pair Corralation between BRF SA and Expedia

Given the investment horizon of 90 days BRF SA ADR is expected to under-perform the Expedia. In addition to that, BRF SA is 1.45 times more volatile than Expedia Group. It trades about 0.0 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.07 per unit of volatility. If you would invest  16,522  in Expedia Group on May 4, 2025 and sell it today you would earn a total of  1,284  from holding Expedia Group or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

BRF SA ADR  vs.  Expedia Group

BRF SA ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRF SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BRF SA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Expedia Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Expedia Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Expedia may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with BRF SA and Expedia

The main advantage of trading using opposite BRF SA and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA 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 BRF SA ADR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .