Correlation Between SosTravel SPA and TUI AG

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

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

Diversification Opportunities for SosTravel SPA and TUI AG

0.0

Correlation Coefficient

SosTravel SPA  TUI AG

Pay attention - limited upside

The 3 months correlation between SosTravel and TUI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SosTravel SPA and TUI AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUI AG and SosTravel SPA 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 SosTravel SPA are associated (or correlated) with TUI AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUI AG has no effect on the direction of SosTravel SPA i.e., SosTravel SPA and TUI AG go up and down completely randomly.

Pair Corralation between SosTravel SPA and TUI AG

If you would invest  692.00  in TUI AG on September 4, 2024 and sell it today you would earn a total of  119.00  from holding TUI AG or generate 17.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SosTravel SPA  vs.  TUI AG

SosTravel SPA

Risk-Adjusted Performance

0 of 100

Very Weak

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

TUI AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TUI AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, TUI AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SosTravel SPA and TUI AG

The main advantage of trading using opposite SosTravel SPA and TUI AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SosTravel SPA position performs unexpectedly, TUI AG 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 TUI AG will offset losses from the drop in TUI AG's long position.

The idea behind SosTravel SPA and TUI AG 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..