Correlation Between TUI AG and Inspirato

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

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

Diversification Opportunities for TUI AG and Inspirato

0.16

Correlation Coefficient

TUI AG  Inspirato

Average diversification

The 3 months correlation between TUI and Inspirato is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and Inspirato in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspirato and TUI AG 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 TUI AG are associated (or correlated) with Inspirato. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspirato has no effect on the direction of TUI AG i.e., TUI AG and Inspirato go up and down completely randomly.

Pair Corralation between TUI AG and Inspirato

Assuming the 90 days horizon TUI AG is expected to generate 1.61 times more return on investment than Inspirato. However, TUI AG is 1.61 times more volatile than Inspirato. It trades about 0.26 of its potential returns per unit of risk. Inspirato is currently generating about -0.04 per unit of risk. If you would invest  700.00  in TUI AG on February 15, 2025 and sell it today you would earn a total of  144.00  from holding TUI AG or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

TUI AG  vs.  Inspirato

TUI AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TUI AG are ranked lower than 5 (%) 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.

Inspirato

Risk-Adjusted Performance

Very Weak

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

Pair Trading with TUI AG and Inspirato

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

The idea behind TUI AG and Inspirato 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.