Correlation Between TuanChe ADR and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and NYSE Composite 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 TuanChe ADR and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and NYSE Composite, you can compare the effects of market volatilities on TuanChe ADR and NYSE Composite 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 TuanChe ADR with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and NYSE Composite.
Diversification Opportunities for TuanChe ADR and NYSE Composite
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TuanChe and NYSE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and TuanChe ADR 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 TuanChe ADR are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and NYSE Composite go up and down completely randomly.
Pair Corralation between TuanChe ADR and NYSE Composite
Allowing for the 90-day total investment horizon TuanChe ADR is expected to generate 12.92 times more return on investment than NYSE Composite. However, TuanChe ADR is 12.92 times more volatile than NYSE Composite. It trades about 0.11 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.16 per unit of risk. If you would invest 165.00 in TuanChe ADR on February 3, 2024 and sell it today you would earn a total of 25.00 from holding TuanChe ADR or generate 15.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TuanChe ADR vs. NYSE Composite
Performance |
Timeline |
TuanChe ADR and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
TuanChe ADR
Pair trading matchups for TuanChe ADR
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with TuanChe ADR and NYSE Composite
The main advantage of trading using opposite TuanChe ADR and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.TuanChe ADR vs. Grom Social Enterprises | TuanChe ADR vs. Digital Brands Group | TuanChe ADR vs. Aquagold International | TuanChe ADR vs. Morningstar Unconstrained Allocation |
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Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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