Correlation Between TuanChe ADR and DouYu International
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and DouYu International 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 DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and DouYu International Holdings, you can compare the effects of market volatilities on TuanChe ADR and DouYu International 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 DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and DouYu International.
Diversification Opportunities for TuanChe ADR and DouYu International
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between TuanChe and DouYu is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International 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 DouYu International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DouYu International has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and DouYu International go up and down completely randomly.
Pair Corralation between TuanChe ADR and DouYu International
Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the DouYu International. In addition to that, TuanChe ADR is 1.11 times more volatile than DouYu International Holdings. It trades about -0.05 of its total potential returns per unit of risk. DouYu International Holdings is currently generating about 0.01 per unit of volatility. If you would invest 1,200 in DouYu International Holdings on December 2, 2024 and sell it today you would lose (485.00) from holding DouYu International Holdings or give up 40.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TuanChe ADR vs. DouYu International Holdings
Performance |
Timeline |
TuanChe ADR |
DouYu International |
TuanChe ADR and DouYu International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TuanChe ADR and DouYu International
The main advantage of trading using opposite TuanChe ADR and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, DouYu International 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 DouYu International will offset losses from the drop in DouYu International's long position.TuanChe ADR vs. Onfolio Holdings | TuanChe ADR vs. Starbox Group Holdings | TuanChe ADR vs. MediaAlpha | TuanChe ADR vs. Metalpha Technology Holding |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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