Correlation Between TUI AG and OneSpaWorld Holdings

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

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

Diversification Opportunities for TUI AG and OneSpaWorld Holdings

0.65

Correlation Coefficient

TUI AG  OneSpaWorld Holdings

Poor diversification

The 3 months correlation between TUI and OneSpaWorld is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TUI AG and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings 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 OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of TUI AG i.e., TUI AG and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between TUI AG and OneSpaWorld Holdings

Assuming the 90 days horizon TUI AG is expected to generate 1.54 times more return on investment than OneSpaWorld Holdings. However, TUI AG is 1.54 times more volatile than OneSpaWorld Holdings. It trades about 0.12 of its potential returns per unit of risk. OneSpaWorld Holdings is currently generating about 0.15 per unit of risk. If you would invest  844.00  in TUI AG on May 22, 2025 and sell it today you would earn a total of  156.00  from holding TUI AG or generate 18.48% return on investment over 90 days.

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

TUI AG  vs.  OneSpaWorld Holdings

TUI AG

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in TUI AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, TUI AG reported solid returns over the last few months and may actually be approaching a breakup point.

OneSpaWorld Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpaWorld Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, OneSpaWorld Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TUI AG and OneSpaWorld Holdings

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

The idea behind TUI AG and OneSpaWorld Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.