Correlation Between Tuniu Corp and Trip Group
Can any of the company-specific risk be diversified away by investing in both Tuniu Corp and Trip Group 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 Trip Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuniu Corp and Trip Group Ltd, you can compare the effects of market volatilities on Tuniu Corp and Trip Group 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 Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuniu Corp and Trip Group.
Diversification Opportunities for Tuniu Corp and Trip Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tuniu and Trip is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tuniu Corp and Trip Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group has no effect on the direction of Tuniu Corp i.e., Tuniu Corp and Trip Group go up and down completely randomly.
Pair Corralation between Tuniu Corp and Trip Group
Given the investment horizon of 90 days Tuniu Corp is expected to generate 18.39 times less return on investment than Trip Group. In addition to that, Tuniu Corp is 1.81 times more volatile than Trip Group Ltd. It trades about 0.0 of its total potential returns per unit of risk. Trip Group Ltd is currently generating about 0.07 per unit of volatility. If you would invest 3,615 in Trip Group Ltd on August 31, 2024 and sell it today you would earn a total of 2,850 from holding Trip Group Ltd or generate 78.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuniu Corp vs. Trip Group Ltd
Performance |
| Timeline |
| Tuniu Corp |
| Trip Group |
Tuniu Corp and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuniu Corp and Trip Group
The main advantage of trading using opposite Tuniu Corp and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuniu Corp position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group's long position.| Tuniu Corp vs. TripAdvisor | Tuniu Corp vs. MakeMyTrip Limited | Tuniu Corp vs. Booking Holdings | Tuniu Corp vs. Despegar Corp |
| Trip Group vs. Expedia Group | Trip Group vs. Booking Holdings | Trip Group vs. Despegar Corp | Trip Group vs. Travel Leisure Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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