Correlation Between TuanChe ADR and TripAdvisor
Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and TripAdvisor 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 TripAdvisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TuanChe ADR and TripAdvisor, you can compare the effects of market volatilities on TuanChe ADR and TripAdvisor 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 TripAdvisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and TripAdvisor.
Diversification Opportunities for TuanChe ADR and TripAdvisor
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TuanChe and TripAdvisor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and TripAdvisor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TripAdvisor 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 TripAdvisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TripAdvisor has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and TripAdvisor go up and down completely randomly.
Pair Corralation between TuanChe ADR and TripAdvisor
Allowing for the 90-day total investment horizon TuanChe ADR is expected to generate 1.23 times more return on investment than TripAdvisor. However, TuanChe ADR is 1.23 times more volatile than TripAdvisor. It trades about 0.08 of its potential returns per unit of risk. TripAdvisor is currently generating about 0.04 per unit of risk. If you would invest 77.00 in TuanChe ADR on March 13, 2025 and sell it today you would earn a total of 14.00 from holding TuanChe ADR or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TuanChe ADR vs. TripAdvisor
Performance |
| Timeline |
| TuanChe ADR |
| TripAdvisor |
TuanChe ADR and TripAdvisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TuanChe ADR and TripAdvisor
The main advantage of trading using opposite TuanChe ADR and TripAdvisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, TripAdvisor 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 TripAdvisor will offset losses from the drop in TripAdvisor's long position.| TuanChe ADR vs. Onfolio Holdings | TuanChe ADR vs. MediaAlpha | TuanChe ADR vs. Metalpha Technology Holding | TuanChe ADR vs. Locafy |
| TripAdvisor vs. Booking Holdings | TripAdvisor vs. Airbnb Inc | TripAdvisor vs. Royal Caribbean Cruises | TripAdvisor vs. Norwegian Cruise Line |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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