Correlation Between TUI AG and Travel Leisure
Can any of the company-specific risk be diversified away by investing in both TUI AG and Travel Leisure 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 Travel Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TUI AG and Travel Leisure Co, you can compare the effects of market volatilities on TUI AG and Travel Leisure 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 Travel Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of TUI AG and Travel Leisure.
Diversification Opportunities for TUI AG and Travel Leisure
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TUI and Travel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and Travel Leisure Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Leisure 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 Travel Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Leisure has no effect on the direction of TUI AG i.e., TUI AG and Travel Leisure go up and down completely randomly.
Pair Corralation between TUI AG and Travel Leisure
Assuming the 90 days horizon TUI AG is expected to generate 0.78 times more return on investment than Travel Leisure. However, TUI AG is 1.28 times less risky than Travel Leisure. It trades about 0.03 of its potential returns per unit of risk. Travel Leisure Co is currently generating about -0.12 per unit of risk. If you would invest 693.00 in TUI AG on January 9, 2025 and sell it today you would earn a total of 7.00 from holding TUI AG or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TUI AG vs. Travel Leisure Co
Performance |
| Timeline |
| TUI AG |
| Travel Leisure |
TUI AG and Travel Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TUI AG and Travel Leisure
The main advantage of trading using opposite TUI AG and Travel Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUI AG position performs unexpectedly, Travel Leisure 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 Travel Leisure will offset losses from the drop in Travel Leisure's long position.| TUI AG vs. Expedia Group | TUI AG vs. Trip Group Ltd | TUI AG vs. Booking Holdings | TUI AG vs. Despegar Corp |
| Travel Leisure vs. Yatra Online | Travel Leisure vs. Despegar Corp | Travel Leisure vs. Lindblad Expeditions Holdings | Travel Leisure vs. Expedia Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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