Correlation Between TuanChe ADR and ZW Data
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and ZW Data 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 ZW Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and ZW Data Action, you can compare the effects of market volatilities on TuanChe ADR and ZW Data 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 ZW Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and ZW Data.
Diversification Opportunities for TuanChe ADR and ZW Data
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TuanChe and CNET is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and ZW Data Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZW Data Action 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 ZW Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZW Data Action has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and ZW Data go up and down completely randomly.
Pair Corralation between TuanChe ADR and ZW Data
Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the ZW Data. In addition to that, TuanChe ADR is 1.17 times more volatile than ZW Data Action. It trades about -0.14 of its total potential returns per unit of risk. ZW Data Action is currently generating about -0.05 per unit of volatility. If you would invest 166.00 in ZW Data Action on January 14, 2025 and sell it today you would lose (16.00) from holding ZW Data Action or give up 9.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TuanChe ADR vs. ZW Data Action
Performance |
| Timeline |
| TuanChe ADR |
| ZW Data Action |
TuanChe ADR and ZW Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TuanChe ADR and ZW Data
The main advantage of trading using opposite TuanChe ADR and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, ZW Data 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 ZW Data will offset losses from the drop in ZW Data's long position.| TuanChe ADR vs. Onfolio Holdings | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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