Correlation Between TuanChe ADR and ANGI Homeservices

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

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

Diversification Opportunities for TuanChe ADR and ANGI Homeservices

0.69

Correlation Coefficient

TuanChe ADR  ANGI Homeservices

Poor diversification

The 3 months correlation between TuanChe and ANGI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices 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 ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and ANGI Homeservices go up and down completely randomly.

Pair Corralation between TuanChe ADR and ANGI Homeservices

Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the ANGI Homeservices. In addition to that, TuanChe ADR is 1.49 times more volatile than ANGI Homeservices. It trades about -0.09 of its total potential returns per unit of risk. ANGI Homeservices is currently generating about -0.1 per unit of volatility. If you would invest  261.00  in ANGI Homeservices on September 1, 2024 and sell it today you would lose (75.00) from holding ANGI Homeservices or give up 28.74% of portfolio value over 90 days.

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

TuanChe ADR  vs.  ANGI Homeservices

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.

ANGI Homeservices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGI Homeservices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with TuanChe ADR and ANGI Homeservices

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

The idea behind TuanChe ADR and ANGI Homeservices 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.