Correlation Between Barnes and Tuniu Corp

Can any of the company-specific risk be diversified away by investing in both Barnes 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 Barnes and Tuniu Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barnes Group and Tuniu Corp, you can compare the effects of market volatilities on Barnes 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 Barnes with a short position of Tuniu Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Tuniu Corp.

Diversification Opportunities for Barnes and Tuniu Corp

-0.67

Correlation Coefficient

Barnes  Tuniu Corp

Excellent diversification

The 3 months correlation between Barnes and Tuniu is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Barnes 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 Barnes Group 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 Barnes i.e., Barnes and Tuniu Corp go up and down completely randomly.

Pair Corralation between Barnes and Tuniu Corp

Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.49 times more return on investment than Tuniu Corp. However, Barnes Group is 2.04 times less risky than Tuniu Corp. It trades about 0.02 of its potential returns per unit of risk. Tuniu Corp is currently generating about -0.01 per unit of risk. If you would invest  4,257  in Barnes Group on October 4, 2024 and sell it today you would earn a total of  469.00  from holding Barnes Group or generate 11.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Barnes Group  vs.  Tuniu Corp

Barnes Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Barnes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Tuniu Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tuniu Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Barnes and Tuniu Corp

The main advantage of trading using opposite Barnes and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes 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.

The idea behind Barnes Group and Tuniu Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.