Correlation Between Imax Corp and TripAdvisor

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

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

Diversification Opportunities for Imax Corp and TripAdvisor

-0.4

Correlation Coefficient

Imax Corp  TripAdvisor

Very good diversification

The 3 months correlation between Imax and TripAdvisor is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and TripAdvisor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TripAdvisor and Imax Corp 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 Imax Corp are associated (or correlated) with TripAdvisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TripAdvisor has no effect on the direction of Imax Corp i.e., Imax Corp and TripAdvisor go up and down completely randomly.

Pair Corralation between Imax Corp and TripAdvisor

Given the investment horizon of 90 days Imax Corp is expected to under-perform the TripAdvisor. But the stock apears to be less risky and, when comparing its historical volatility, Imax Corp is 2.09 times less risky than TripAdvisor. The stock trades about -0.05 of its potential returns per unit of risk. The TripAdvisor is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,461  in TripAdvisor on May 20, 2025 and sell it today you would earn a total of  301.00  from holding TripAdvisor or generate 20.6% return on investment over 90 days.

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

Imax Corp  vs.  TripAdvisor

Imax Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Imax Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Imax Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

TripAdvisor

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in TripAdvisor are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward indicators, TripAdvisor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imax Corp and TripAdvisor

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

The idea behind Imax Corp and TripAdvisor 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.