Correlation Between TuanChe ADR and AMC Networks

Can any of the company-specific risk be diversified away by investing in both TuanChe ADR and AMC Networks 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 TuanChe ADR and AMC Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TuanChe ADR and AMC Networks, you can compare the effects of market volatilities on TuanChe ADR and AMC Networks 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 TuanChe ADR with a short position of AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of TuanChe ADR and AMC Networks.

Diversification Opportunities for TuanChe ADR and AMC Networks

0.78

Correlation Coefficient

TuanChe ADR  AMC Networks

Poor diversification

The 3 months correlation between TuanChe and AMC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding TuanChe ADR and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and TuanChe ADR 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 TuanChe ADR are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of TuanChe ADR i.e., TuanChe ADR and AMC Networks go up and down completely randomly.

Pair Corralation between TuanChe ADR and AMC Networks

Allowing for the 90-day total investment horizon TuanChe ADR is expected to under-perform the AMC Networks. In addition to that, TuanChe ADR is 1.3 times more volatile than AMC Networks. It trades about -0.17 of its total potential returns per unit of risk. AMC Networks is currently generating about -0.17 per unit of volatility. If you would invest  945.00  in AMC Networks on February 3, 2025 and sell it today you would lose (320.00) from holding AMC Networks or give up 33.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

TuanChe ADR  vs.  AMC Networks

TuanChe ADR

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AMC Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMC Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TuanChe ADR and AMC Networks

The main advantage of trading using opposite TuanChe ADR and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TuanChe ADR position performs unexpectedly, AMC Networks 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 AMC Networks will offset losses from the drop in AMC Networks' long position.

The idea behind TuanChe ADR and AMC Networks 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.