Correlation Between TuanChe ADR and Yelp
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and Yelp 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 Yelp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and Yelp Inc, you can compare the effects of market volatilities on TuanChe ADR and Yelp 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 Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and Yelp.
Diversification Opportunities for TuanChe ADR and Yelp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TuanChe and Yelp is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc 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 Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and Yelp go up and down completely randomly.
Pair Corralation between TuanChe ADR and Yelp
Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the Yelp. In addition to that, TuanChe ADR is 3.67 times more volatile than Yelp Inc. It trades about -0.32 of its total potential returns per unit of risk. Yelp Inc is currently generating about 0.15 per unit of volatility. If you would invest 3,412 in Yelp Inc on August 27, 2024 and sell it today you would earn a total of 201.00 from holding Yelp Inc or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TuanChe ADR vs. Yelp Inc
Performance |
| Timeline |
| TuanChe ADR |
| Yelp Inc |
TuanChe ADR and Yelp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TuanChe ADR and Yelp
The main advantage of trading using opposite TuanChe ADR and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp'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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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