Correlation Between International Business and TuanChe

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

Diversification Opportunities for International Business and TuanChe

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between International and TuanChe is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited and International Business 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 International Business Machines 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 International Business i.e., International Business and TuanChe go up and down completely randomly.

Pair Corralation between International Business and TuanChe

Considering the 90-day investment horizon International Business Machines is expected to generate 0.19 times more return on investment than TuanChe. However, International Business Machines is 5.33 times less risky than TuanChe. It trades about 0.1 of its potential returns per unit of risk. TuanChe Limited is currently generating about 0.02 per unit of risk. If you would invest  13,884  in International Business Machines on March 30, 2022 and sell it today you would earn a total of  302.00  from holding International Business Machines or generate 2.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

International Business Machine  vs.  TuanChe Limited

 Performance (%) 
      Timeline 
International Business 
International Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, International Business may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0465
Payout Ratio
0.68
Last Split Factor
1046:1000
Forward Annual Dividend Rate
6.6
Dividend Date
2022-06-10
Ex Dividend Date
2022-05-09
Last Split Date
2021-11-04

International Price Channel

TuanChe Limited 
TuanChe Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TuanChe Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, TuanChe may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

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

TuanChe Price Channel

International Business and TuanChe Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with International Business and TuanChe

The main advantage of trading using opposite International Business and TuanChe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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 International Business Machines 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.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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