Correlation Between FaZe Holdings and TuanChe ADR

Can any of the company-specific risk be diversified away by investing in both FaZe Holdings 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 FaZe Holdings and TuanChe ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FaZe Holdings and TuanChe ADR, you can compare the effects of market volatilities on FaZe Holdings 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 FaZe Holdings with a short position of TuanChe ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of FaZe Holdings and TuanChe ADR.

Diversification Opportunities for FaZe Holdings and TuanChe ADR

0.59

Correlation Coefficient

FaZe Holdings  TuanChe ADR

Very weak diversification

The 3 months correlation between FaZe and TuanChe is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FaZe Holdings and TuanChe ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe ADR and FaZe Holdings 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 FaZe Holdings 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 FaZe Holdings i.e., FaZe Holdings and TuanChe ADR go up and down completely randomly.

Pair Corralation between FaZe Holdings and TuanChe ADR

If you would invest  41.00  in FaZe Holdings on August 31, 2024 and sell it today you would earn a total of  0.00  from holding FaZe Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

FaZe Holdings  vs.  TuanChe ADR

FaZe Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FaZe Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FaZe Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

TuanChe ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TuanChe ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with FaZe Holdings and TuanChe ADR

The main advantage of trading using opposite FaZe Holdings and TuanChe ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FaZe Holdings 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 FaZe Holdings 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.