Correlation Between TuanChe ADR and Gaxosai

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

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

Diversification Opportunities for TuanChe ADR and Gaxosai

0.66

Correlation Coefficient

TuanChe ADR  Gaxosai

Poor diversification

The 3 months correlation between TuanChe and Gaxosai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and Gaxosai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaxosai 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 Gaxosai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaxosai has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and Gaxosai go up and down completely randomly.

Pair Corralation between TuanChe ADR and Gaxosai

Allowing for the 90-day total investment horizon TuanChe ADR is expected to generate 1.1 times more return on investment than Gaxosai. However, TuanChe ADR is 1.1 times more volatile than Gaxosai. It trades about 0.07 of its potential returns per unit of risk. Gaxosai is currently generating about 0.01 per unit of risk. If you would invest  57.00  in TuanChe ADR on May 4, 2025 and sell it today you would earn a total of  8.00  from holding TuanChe ADR or generate 14.04% return on investment over 90 days.

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

TuanChe ADR  vs.  Gaxosai

TuanChe ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TuanChe ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, TuanChe ADR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gaxosai

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gaxosai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gaxosai is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with TuanChe ADR and Gaxosai

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

The idea behind TuanChe ADR and Gaxosai 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.