Correlation Between Ford and TuanChe

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

Diversification Opportunities for Ford and TuanChe

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Ford and TuanChe is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited and Ford 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 Ford Motor 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 Ford i.e., Ford and TuanChe go up and down completely randomly.

Pair Corralation between Ford and TuanChe

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.38 times more return on investment than TuanChe. However, Ford Motor is 2.64 times less risky than TuanChe. It trades about 0.06 of its potential returns per unit of risk. TuanChe Limited is currently generating about 0.0 per unit of risk. If you would invest  609.00  in Ford Motor on March 27, 2022 and sell it today you would earn a total of  592.00  from holding Ford Motor or generate 97.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ford Motor  vs.  TuanChe Limited

 Performance (%) 
      Timeline 
Ford Motor 
Ford Performance
0 of 100
Over the last 90 days Ford Motor 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in July 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0356
Payout Ratio
0.23
Last Split Factor
1748175:10
Forward Annual Dividend Rate
0.4
Dividend Date
2022-06-01
Ex Dividend Date
2022-04-25
Last Split Date
2000-08-03

Ford Price Channel

TuanChe Limited 
TuanChe Performance
0 of 100
Over the last 90 days TuanChe Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, TuanChe is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

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

TuanChe Price Channel

Ford and TuanChe Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ford and TuanChe

The main advantage of trading using opposite Ford and TuanChe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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