Correlation Between Krispy Kreme and Tuniu Corp
Can any of the company-specific risk be diversified away by investing in both Krispy Kreme 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 Krispy Kreme and Tuniu Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krispy Kreme and Tuniu Corp, you can compare the effects of market volatilities on Krispy Kreme 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 Krispy Kreme with a short position of Tuniu Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krispy Kreme and Tuniu Corp.
Diversification Opportunities for Krispy Kreme and Tuniu Corp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krispy and Tuniu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Krispy Kreme 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 Krispy Kreme 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 Krispy Kreme i.e., Krispy Kreme and Tuniu Corp go up and down completely randomly.
Pair Corralation between Krispy Kreme and Tuniu Corp
Given the investment horizon of 90 days Krispy Kreme is expected to under-perform the Tuniu Corp. But the stock apears to be less risky and, when comparing its historical volatility, Krispy Kreme is 1.37 times less risky than Tuniu Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Tuniu Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Tuniu Corp on November 9, 2024 and sell it today you would earn a total of 35.00 from holding Tuniu Corp or generate 54.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krispy Kreme vs. Tuniu Corp
Performance |
| Timeline |
| Krispy Kreme |
| Tuniu Corp |
Krispy Kreme and Tuniu Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krispy Kreme and Tuniu Corp
The main advantage of trading using opposite Krispy Kreme and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krispy Kreme 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.| Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies | Krispy Kreme vs. Ingles Markets Incorporated |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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