Correlation Between Expedia and Marriott International

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

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

Diversification Opportunities for Expedia and Marriott International

0.68

Correlation Coefficient

Expedia  Marriott International

Poor diversification

The 3 months correlation between Expedia and Marriott is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Expedia 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 Expedia Group are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Expedia i.e., Expedia and Marriott International go up and down completely randomly.

Pair Corralation between Expedia and Marriott International

Given the investment horizon of 90 days Expedia Group is expected to generate 1.38 times more return on investment than Marriott International. However, Expedia is 1.38 times more volatile than Marriott International. It trades about 0.07 of its potential returns per unit of risk. Marriott International is currently generating about 0.02 per unit of risk. If you would invest  16,434  in Expedia Group on May 6, 2025 and sell it today you would earn a total of  1,372  from holding Expedia Group or generate 8.35% return on investment over 90 days.

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

Expedia Group  vs.  Marriott International

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 fragile basic indicators, Expedia may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Marriott International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Marriott International is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Expedia and Marriott International

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

The idea behind Expedia Group and Marriott International 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.