Correlation Between Applied Materials and TuanChe

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Can any of the company-specific risk be diversified away by investing in both Applied Materials and TuanChe 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 Applied Materials and TuanChe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and TuanChe Limited, you can compare the effects of market volatilities on Applied Materials and TuanChe 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 Applied Materials with a short position of TuanChe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and TuanChe.

Diversification Opportunities for Applied Materials and TuanChe

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Applied and TuanChe is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited and Applied Materials 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 Applied Materials are associated (or correlated) with TuanChe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuanChe Limited has no effect on the direction of Applied Materials i.e., Applied Materials and TuanChe go up and down completely randomly.

Pair Corralation between Applied Materials and TuanChe

Given the investment horizon of 90 days Applied Materials is expected to under-perform the TuanChe. But the stock apears to be less risky and, when comparing its historical volatility, Applied Materials is 1.76 times less risky than TuanChe. The stock trades about -0.09 of its potential returns per unit of risk. The TuanChe Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  222.00  in TuanChe Limited on March 29, 2022 and sell it today you would lose (9.00)  from holding TuanChe Limited or give up 4.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy97.62%
ValuesDaily Returns

Applied Materials  vs.  TuanChe Limited

 Performance (%) 
      Timeline 
Applied Materials 
Applied Performance
0 of 100
Over the last 90 days Applied Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0107
Payout Ratio
0.13
Last Split Factor
2:1
Forward Annual Dividend Rate
1.04
Dividend Date
2022-09-15
Ex Dividend Date
2022-08-24
Last Split Date
2002-04-17

Applied Price Channel

TuanChe Limited 
TuanChe Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TuanChe Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, TuanChe sustained solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
1:4
Dividend Date
2020-10-22
Last Split Date
2020-10-22

TuanChe Price Channel

Applied Materials and TuanChe Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Applied Materials and TuanChe

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

TuanChe Limited

Pair trading matchups for TuanChe

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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