Correlation Between TuanChe ADR and Locafy
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and Locafy 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 Locafy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and Locafy Limited, you can compare the effects of market volatilities on TuanChe ADR and Locafy 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 Locafy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and Locafy.
Diversification Opportunities for TuanChe ADR and Locafy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TuanChe and Locafy is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and Locafy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy Limited 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 Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy Limited has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and Locafy go up and down completely randomly.
Pair Corralation between TuanChe ADR and Locafy
Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the Locafy. In addition to that, TuanChe ADR is 1.1 times more volatile than Locafy Limited. It trades about -0.22 of its total potential returns per unit of risk. Locafy Limited is currently generating about 0.11 per unit of volatility. If you would invest 639.00 in Locafy Limited on August 27, 2024 and sell it today you would earn a total of 61.00 from holding Locafy Limited or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
TuanChe ADR vs. Locafy Limited
Performance |
| Timeline |
| TuanChe ADR |
| Locafy Limited |
TuanChe ADR and Locafy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TuanChe ADR and Locafy
The main advantage of trading using opposite TuanChe ADR and Locafy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, Locafy 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 Locafy will offset losses from the drop in Locafy's long position.| TuanChe ADR vs. Onfolio Holdings | TuanChe ADR vs. Starbox Group Holdings | TuanChe ADR vs. MediaAlpha | TuanChe ADR vs. Metalpha Technology Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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