Correlation Between Carnival and Tuniu Corp
Can any of the company-specific risk be diversified away by investing in both Carnival and Tuniu Corp 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 Carnival and Tuniu Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival and Tuniu Corp, you can compare the effects of market volatilities on Carnival and Tuniu Corp 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 Carnival with a short position of Tuniu Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival and Tuniu Corp.
Diversification Opportunities for Carnival and Tuniu Corp
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carnival and Tuniu is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Carnival and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Carnival 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 Carnival are associated (or correlated) with Tuniu Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuniu Corp has no effect on the direction of Carnival i.e., Carnival and Tuniu Corp go up and down completely randomly.
Pair Corralation between Carnival and Tuniu Corp
Considering the 90-day investment horizon Carnival is expected to generate 1.02 times more return on investment than Tuniu Corp. However, Carnival is 1.02 times more volatile than Tuniu Corp. It trades about 0.07 of its potential returns per unit of risk. Tuniu Corp is currently generating about -0.01 per unit of risk. If you would invest 2,518 in Carnival on October 20, 2024 and sell it today you would earn a total of 67.00 from holding Carnival or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnival vs. Tuniu Corp
Performance |
| Timeline |
| Carnival |
| Tuniu Corp |
Carnival and Tuniu Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival and Tuniu Corp
The main advantage of trading using opposite Carnival and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival position performs unexpectedly, Tuniu Corp 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 Tuniu Corp will offset losses from the drop in Tuniu Corp's long position.| Carnival vs. Royal Caribbean Cruises | Carnival vs. Airbnb Inc | Carnival vs. Expedia Group | Carnival vs. Booking Holdings |
| Tuniu Corp vs. TripAdvisor | Tuniu Corp vs. MakeMyTrip Limited | Tuniu Corp vs. Booking Holdings | Tuniu Corp vs. Despegar Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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