Correlation Between YY and TuanChe ADR
Can any of the company-specific risk be diversified away by investing in both YY 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 YY and TuanChe ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YY Inc Class and TuanChe ADR, you can compare the effects of market volatilities on YY 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 YY with a short position of TuanChe ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and TuanChe ADR.
Diversification Opportunities for YY and TuanChe ADR
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YY and TuanChe is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and TuanChe ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe ADR and YY 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 YY Inc Class 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 YY i.e., YY and TuanChe ADR go up and down completely randomly.
Pair Corralation between YY and TuanChe ADR
Allowing for the 90-day total investment horizon YY Inc Class is expected to generate 0.31 times more return on investment than TuanChe ADR. However, YY Inc Class is 3.24 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 -0.29 per unit of risk. If you would invest 3,412 in YY Inc Class on August 26, 2024 and sell it today you would lose (21.00) from holding YY Inc Class or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YY Inc Class vs. TuanChe ADR
Performance |
| Timeline |
| YY Inc Class |
| TuanChe ADR |
YY and TuanChe ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and TuanChe ADR
The main advantage of trading using opposite YY and TuanChe ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY 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.The idea behind YY Inc Class and TuanChe ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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