Correlation Between TuanChe ADR and Upexi

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

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

Diversification Opportunities for TuanChe ADR and Upexi

-0.58

Correlation Coefficient

TuanChe ADR  Upexi

Excellent diversification

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

Pair Corralation between TuanChe ADR and Upexi

Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the Upexi. But the stock apears to be less risky and, when comparing its historical volatility, TuanChe ADR is 3.66 times less risky than Upexi. The stock trades about -0.11 of its potential returns per unit of risk. The Upexi Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  414.00  in Upexi Inc on August 30, 2024 and sell it today you would earn a total of  50.00  from holding Upexi Inc or generate 12.08% return on investment over 90 days.

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

TuanChe ADR  vs.  Upexi Inc

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.

Upexi Inc

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Upexi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, Upexi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TuanChe ADR and Upexi

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

The idea behind TuanChe ADR and Upexi 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.