Correlation Between Booking Holdings and Tuniu Corp

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

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

Diversification Opportunities for Booking Holdings and Tuniu Corp

0.55

Correlation Coefficient

Booking Holdings  Tuniu Corp

Very weak diversification

The 3 months correlation between Booking and Tuniu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Booking Holdings 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 Booking Holdings 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 Booking Holdings i.e., Booking Holdings and Tuniu Corp go up and down completely randomly.

Pair Corralation between Booking Holdings and Tuniu Corp

Given the investment horizon of 90 days Booking Holdings is expected to generate 0.54 times more return on investment than Tuniu Corp. However, Booking Holdings is 1.87 times less risky than Tuniu Corp. It trades about -0.03 of its potential returns per unit of risk. Tuniu Corp is currently generating about -0.05 per unit of risk. If you would invest  519,337  in Booking Holdings on November 28, 2024 and sell it today you would lose (15,954) from holding Booking Holdings or give up 3.07% of portfolio value over 90 days.

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

Booking Holdings  vs.  Tuniu Corp

Booking Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Booking Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Booking Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Tuniu Corp

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Booking Holdings and Tuniu Corp

The main advantage of trading using opposite Booking Holdings and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings 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 Booking Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.