Correlation Between Caesars Entertainment and Tuniu Corp

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

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

Diversification Opportunities for Caesars Entertainment and Tuniu Corp

-0.7

Correlation Coefficient

Caesars Entertainment  Tuniu Corp

Excellent diversification

The 3 months correlation between Caesars and Tuniu is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment and Tuniu Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuniu Corp and Caesars Entertainment 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 Caesars 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 Caesars Entertainment i.e., Caesars Entertainment and Tuniu Corp go up and down completely randomly.

Pair Corralation between Caesars Entertainment and Tuniu Corp

Considering the 90-day investment horizon Caesars Entertainment is expected to under-perform the Tuniu Corp. But the stock apears to be less risky and, when comparing its historical volatility, Caesars Entertainment is 1.58 times less risky than Tuniu Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Tuniu Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  185.00  in Tuniu Corp on January 7, 2025 and sell it today you would lose (86.30) from holding Tuniu Corp or give up 46.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Caesars Entertainment  vs.  Tuniu Corp

Caesars Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caesars Entertainment 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 May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Tuniu Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tuniu Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Tuniu Corp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Caesars Entertainment and Tuniu Corp

The main advantage of trading using opposite Caesars Entertainment and Tuniu Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caesars Entertainment 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 Caesars 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.