Correlation Between Weibo Corp and TuanChe ADR
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and TuanChe ADR 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 Weibo Corp and TuanChe ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and TuanChe ADR, you can compare the effects of market volatilities on Weibo Corp and TuanChe ADR 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 Weibo Corp with a short position of TuanChe ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and TuanChe ADR.
Diversification Opportunities for Weibo Corp and TuanChe ADR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weibo and TuanChe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and TuanChe ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe ADR and Weibo Corp 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 Weibo Corp are associated (or correlated) with TuanChe ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuanChe ADR has no effect on the direction of Weibo Corp i.e., Weibo Corp and TuanChe ADR go up and down completely randomly.
Pair Corralation between Weibo Corp and TuanChe ADR
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.41 times more return on investment than TuanChe ADR. However, Weibo Corp is 2.41 times less risky than TuanChe ADR. It trades about 0.0 of its potential returns per unit of risk. TuanChe ADR is currently generating about -0.26 per unit of risk. If you would invest 924.00 in Weibo Corp on August 23, 2024 and sell it today you would lose (6.00) from holding Weibo Corp or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. TuanChe ADR
Performance |
| Timeline |
| Weibo Corp |
| TuanChe ADR |
Weibo Corp and TuanChe ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and TuanChe ADR
The main advantage of trading using opposite Weibo Corp and TuanChe ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, TuanChe ADR 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 TuanChe ADR will offset losses from the drop in TuanChe ADR's long position.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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