Correlation Between FBR ASSET and TuanChe

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

Diversification Opportunities for FBR ASSET and TuanChe

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between FBR ASSET and TuanChe is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding FBR ASSET INVESTMENT and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited and FBR ASSET 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 FBR ASSET INVESTMENT 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 FBR ASSET i.e., FBR ASSET and TuanChe go up and down completely randomly.

Pair Corralation between FBR ASSET and TuanChe

Allowing for the 90-day total investment horizon FBR ASSET INVESTMENT is expected to under-perform the TuanChe. But the stock apears to be less risky and, when comparing its historical volatility, FBR ASSET INVESTMENT is 2.07 times less risky than TuanChe. The stock trades about -0.23 of its potential returns per unit of risk. The TuanChe Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  208.00  in TuanChe Limited on May 21, 2022 and sell it today you would earn a total of  32.00  from holding TuanChe Limited or generate 15.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy30.43%
ValuesDaily Returns

FBR ASSET INVESTMENT  vs.  TuanChe Limited

 Performance (%) 
       Timeline  
FBR ASSET INVESTMENT 
FBR ASSET Performance
0 of 100
Over the last 90 days FBR ASSET INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in September 2022. The current disturbance may also be a sign of long term up-swing for the company investors.
TuanChe Limited 
TuanChe Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TuanChe Limited are ranked lower than 4 (%) 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.

TuanChe Price Channel

FBR ASSET and TuanChe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FBR ASSET and TuanChe

The main advantage of trading using opposite FBR ASSET and TuanChe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FBR ASSET 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.

FBR ASSET INVESTMENT

Pair trading matchups for FBR ASSET

The idea behind FBR ASSET INVESTMENT 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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