Correlation Between TUI AG and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both TUI AG and Amadeus IT 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 TUI AG and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TUI AG and Amadeus IT Holding, you can compare the effects of market volatilities on TUI AG and Amadeus IT 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 TUI AG with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of TUI AG and Amadeus IT.
Diversification Opportunities for TUI AG and Amadeus IT
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TUI and Amadeus is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and Amadeus IT Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Holding and TUI AG 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 TUI AG are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Holding has no effect on the direction of TUI AG i.e., TUI AG and Amadeus IT go up and down completely randomly.
Pair Corralation between TUI AG and Amadeus IT
Assuming the 90 days horizon TUI AG is expected to generate 2.33 times more return on investment than Amadeus IT. However, TUI AG is 2.33 times more volatile than Amadeus IT Holding. It trades about -0.05 of its potential returns per unit of risk. Amadeus IT Holding is currently generating about -0.17 per unit of risk. If you would invest 835.00 in TUI AG on August 31, 2024 and sell it today you would lose (30.00) from holding TUI AG or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TUI AG vs. Amadeus IT Holding
Performance |
| Timeline |
| TUI AG |
| Amadeus IT Holding |
TUI AG and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TUI AG and Amadeus IT
The main advantage of trading using opposite TUI AG and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUI AG position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| TUI AG vs. Expedia Group | TUI AG vs. Trip Group Ltd | TUI AG vs. Booking Holdings | TUI AG vs. Despegar Corp |
| Amadeus IT vs. Arma Services | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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