Correlation Between Tuniu Corp and Huazhu
Can any of the company-specific risk be diversified away by investing in both Tuniu Corp and Huazhu 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 Huazhu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuniu Corp and Huazhu Group, you can compare the effects of market volatilities on Tuniu Corp and Huazhu 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 Huazhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuniu Corp and Huazhu.
Diversification Opportunities for Tuniu Corp and Huazhu
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tuniu and Huazhu is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tuniu Corp and Huazhu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huazhu 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 Huazhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huazhu Group has no effect on the direction of Tuniu Corp i.e., Tuniu Corp and Huazhu go up and down completely randomly.
Pair Corralation between Tuniu Corp and Huazhu
Given the investment horizon of 90 days Tuniu Corp is expected to generate 1.89 times more return on investment than Huazhu. However, Tuniu Corp is 1.89 times more volatile than Huazhu Group. It trades about 0.0 of its potential returns per unit of risk. Huazhu Group is currently generating about 0.0 per unit of risk. If you would invest 176.00 in Tuniu Corp on September 14, 2024 and sell it today you would lose (71.00) from holding Tuniu Corp or give up 40.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tuniu Corp vs. Huazhu Group
Performance |
| Timeline |
| Tuniu Corp |
| Huazhu Group |
Tuniu Corp and Huazhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuniu Corp and Huazhu
The main advantage of trading using opposite Tuniu Corp and Huazhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuniu Corp position performs unexpectedly, Huazhu 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 Huazhu will offset losses from the drop in Huazhu's long position.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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