Correlation Between TuanChe ADR and Netflix
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and Netflix 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 Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and Netflix, you can compare the effects of market volatilities on TuanChe ADR and Netflix 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 Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and Netflix.
Diversification Opportunities for TuanChe ADR and Netflix
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TuanChe and Netflix is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix 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 Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and Netflix go up and down completely randomly.
Pair Corralation between TuanChe ADR and Netflix
Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the Netflix. In addition to that, TuanChe ADR is 2.72 times more volatile than Netflix. It trades about -0.06 of its total potential returns per unit of risk. Netflix is currently generating about 0.11 per unit of volatility. If you would invest 30,556 in Netflix on August 27, 2024 and sell it today you would earn a total of 59,223 from holding Netflix or generate 193.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TuanChe ADR vs. Netflix
Performance |
| Timeline |
| TuanChe ADR |
| Netflix |
TuanChe ADR and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TuanChe ADR and Netflix
The main advantage of trading using opposite TuanChe ADR and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, Netflix 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 Netflix will offset losses from the drop in Netflix's long position.| TuanChe ADR vs. Onfolio Holdings | TuanChe ADR vs. Starbox Group Holdings | TuanChe ADR vs. MediaAlpha | TuanChe ADR vs. Metalpha Technology Holding |
| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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