Correlation Between TuanChe ADR and Blue Ocean

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

By analyzing existing cross correlation between TuanChe ADR and Blue Ocean Acquisition, you can compare the effects of market volatilities on TuanChe ADR and Blue Ocean 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 Blue Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and Blue Ocean.

Diversification Opportunities for TuanChe ADR and Blue Ocean

0.41

Correlation Coefficient

TuanChe ADR  Blue Ocean

Very weak diversification

The 3 months correlation between TuanChe and Blue is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and Blue Ocean Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Ocean Acquisition 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 Blue Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Ocean Acquisition has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and Blue Ocean go up and down completely randomly.

Pair Corralation between TuanChe ADR and Blue Ocean

If you would invest  102.00  in TuanChe ADR on October 8, 2024 and sell it today you would earn a total of  10.00  from holding TuanChe ADR or generate 9.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

TuanChe ADR  vs.  Blue Ocean Acquisition

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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Blue Ocean Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Ocean Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Blue Ocean is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TuanChe ADR and Blue Ocean

The main advantage of trading using opposite TuanChe ADR and Blue Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, Blue Ocean 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 Blue Ocean will offset losses from the drop in Blue Ocean's long position.

The idea behind TuanChe ADR and Blue Ocean Acquisition 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.