Correlation Between Six Flags and Tuniu Corp

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

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

Diversification Opportunities for Six Flags and Tuniu Corp

-0.8

Correlation Coefficient

Six Flags  Tuniu Corp

Pay attention - limited upside

The 3 months correlation between Six and Tuniu is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Six Flags 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 Six Flags Entertainment 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 Six Flags i.e., Six Flags and Tuniu Corp go up and down completely randomly.

Pair Corralation between Six Flags and Tuniu Corp

Considering the 90-day investment horizon Six Flags Entertainment is expected to under-perform the Tuniu Corp. In addition to that, Six Flags is 1.22 times more volatile than Tuniu Corp. It trades about -0.15 of its total potential returns per unit of risk. Tuniu Corp is currently generating about 0.09 per unit of volatility. If you would invest  98.00  in Tuniu Corp on December 27, 2024 and sell it today you would earn a total of  11.00  from holding Tuniu Corp or generate 11.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Six Flags Entertainment  vs.  Tuniu Corp

Six Flags Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tuniu Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tuniu Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Tuniu Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Six Flags and Tuniu Corp

The main advantage of trading using opposite Six Flags and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags 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 Six Flags Entertainment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.