Correlation Between TuanChe ADR and IZEA

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

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

Diversification Opportunities for TuanChe ADR and IZEA

0.58

Correlation Coefficient

TuanChe ADR  IZEA

Very weak diversification

The 3 months correlation between TuanChe and IZEA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and IZEA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZEA Inc 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 IZEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZEA Inc has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and IZEA go up and down completely randomly.

Pair Corralation between TuanChe ADR and IZEA

Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the IZEA. In addition to that, TuanChe ADR is 1.5 times more volatile than IZEA Inc. It trades about -0.09 of its total potential returns per unit of risk. IZEA Inc is currently generating about -0.08 per unit of volatility. If you would invest  251.00  in IZEA Inc on December 27, 2024 and sell it today you would lose (45.00) from holding IZEA Inc or give up 17.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

TuanChe ADR  vs.  IZEA Inc

TuanChe ADR

Risk-Adjusted Performance

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

IZEA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days IZEA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TuanChe ADR and IZEA

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

The idea behind TuanChe ADR and IZEA Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.