Correlation Between Tuniu Corp and Expedia
Can any of the company-specific risk be diversified away by investing in both Tuniu Corp 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 Tuniu Corp and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuniu Corp and Expedia Group, you can compare the effects of market volatilities on Tuniu Corp 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 Tuniu Corp with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuniu Corp and Expedia.
Diversification Opportunities for Tuniu Corp and Expedia
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tuniu and Expedia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tuniu Corp and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Tuniu 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 Tuniu Corp 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 Tuniu Corp i.e., Tuniu Corp and Expedia go up and down completely randomly.
Pair Corralation between Tuniu Corp and Expedia
Given the investment horizon of 90 days Tuniu Corp is expected to under-perform the Expedia. In addition to that, Tuniu Corp is 2.1 times more volatile than Expedia Group. It trades about -0.02 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.42 per unit of volatility. If you would invest 16,111 in Expedia Group on September 3, 2024 and sell it today you would earn a total of 2,351 from holding Expedia Group or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuniu Corp vs. Expedia Group
Performance |
| Timeline |
| Tuniu Corp |
| Expedia Group |
Tuniu Corp and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuniu Corp and Expedia
The main advantage of trading using opposite Tuniu Corp and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuniu Corp 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.| Tuniu Corp vs. TripAdvisor | Tuniu Corp vs. MakeMyTrip Limited | Tuniu Corp vs. Booking Holdings | Tuniu Corp vs. Despegar Corp |
| Expedia vs. Airbnb Inc | Expedia vs. TripAdvisor | Expedia vs. Royal Caribbean Cruises | Expedia vs. Norwegian Cruise Line |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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