Correlation Between Vmware and TuanChe

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

Diversification Opportunities for Vmware and TuanChe

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Vmware and TuanChe is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vmware Inc and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited and Vmware 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 Vmware Inc 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 Vmware i.e., Vmware and TuanChe go up and down completely randomly.

Pair Corralation between Vmware and TuanChe

Considering the 90-day investment horizon Vmware Inc is expected to under-perform the TuanChe. But the stock apears to be less risky and, when comparing its historical volatility, Vmware Inc is 3.59 times less risky than TuanChe. The stock trades about -0.14 of its potential returns per unit of risk. The TuanChe Limited is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  228.00  in TuanChe Limited on March 27, 2022 and sell it today you would lose (17.00)  from holding TuanChe Limited or give up 7.46% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Vmware Inc  vs.  TuanChe Limited

 Performance (%) 
      Timeline 
Vmware Inc 
Vmware Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vmware Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable primary indicators, Vmware is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Structure and Payout Changes

Payout Ratio
0.0405
Dividend Date
2021-11-01
Ex Dividend Date
2021-11-02

Vmware 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

Vmware and TuanChe Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Vmware and TuanChe

The main advantage of trading using opposite Vmware and TuanChe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vmware 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 Vmware Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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