Correlation Between TUI AG and Tuniu Corp
Can any of the company-specific risk be diversified away by investing in both TUI AG and Tuniu Corp 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 Tuniu Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TUI AG and Tuniu Corp, you can compare the effects of market volatilities on TUI AG and Tuniu Corp 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 Tuniu Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TUI AG and Tuniu Corp.
Diversification Opportunities for TUI AG and Tuniu Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TUI and Tuniu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp 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 Tuniu Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuniu Corp has no effect on the direction of TUI AG i.e., TUI AG and Tuniu Corp go up and down completely randomly.
Pair Corralation between TUI AG and Tuniu Corp
Assuming the 90 days horizon TUI AG is expected to generate 0.8 times more return on investment than Tuniu Corp. However, TUI AG is 1.24 times less risky than Tuniu Corp. It trades about -0.05 of its potential returns per unit of risk. Tuniu Corp is currently generating about -0.06 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TUI AG vs. Tuniu Corp
Performance |
| Timeline |
| TUI AG |
| Tuniu Corp |
TUI AG and Tuniu Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TUI AG and Tuniu Corp
The main advantage of trading using opposite TUI AG and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUI AG position performs unexpectedly, Tuniu Corp 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 Tuniu Corp will offset losses from the drop in Tuniu Corp's long position.| TUI AG vs. Expedia Group | TUI AG vs. Trip Group Ltd | TUI AG vs. Booking Holdings | TUI AG vs. Despegar Corp |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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