Correlation Between Genius Sports and TuanChe ADR

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

Diversification Opportunities for Genius Sports and TuanChe ADR

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Genius and TuanChe is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and TuanChe ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe ADR and Genius Sports 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 Genius Sports are associated (or correlated) with TuanChe ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuanChe ADR has no effect on the direction of Genius Sports i.e., Genius Sports and TuanChe ADR go up and down completely randomly.

Pair Corralation between Genius Sports and TuanChe ADR

Given the investment horizon of 90 days Genius Sports is expected to under-perform the TuanChe ADR. But the stock apears to be less risky and, when comparing its historical volatility, Genius Sports is 1.72 times less risky than TuanChe ADR. The stock trades about -0.32 of its potential returns per unit of risk. The TuanChe ADR is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  177.00  in TuanChe ADR on December 29, 2023 and sell it today you would lose (19.00) from holding TuanChe ADR or give up 10.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Genius Sports  vs.  TuanChe ADR

 Performance 
       Timeline  
Genius Sports 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Genius Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
TuanChe ADR 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days TuanChe ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Genius Sports and TuanChe ADR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genius Sports and TuanChe ADR

The main advantage of trading using opposite Genius Sports and TuanChe ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Sports position performs unexpectedly, TuanChe ADR 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 ADR will offset losses from the drop in TuanChe ADR's long position.
The idea behind Genius Sports and TuanChe ADR 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.
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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 the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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