Correlation Between Tianjin Realty and Meinian Onehealth

Can any of the company-specific risk be diversified away by investing in both Tianjin Realty and Meinian Onehealth 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 Tianjin Realty and Meinian Onehealth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tianjin Realty Development and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Tianjin Realty and Meinian Onehealth 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 Tianjin Realty with a short position of Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Realty and Meinian Onehealth.

Diversification Opportunities for Tianjin Realty and Meinian Onehealth

0.68

Correlation Coefficient

Tianjin Realty  Meinian Onehealth

Poor diversification

The 3 months correlation between Tianjin and Meinian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth and Tianjin Realty 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 Tianjin Realty Development are associated (or correlated) with Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Tianjin Realty i.e., Tianjin Realty and Meinian Onehealth go up and down completely randomly.

Pair Corralation between Tianjin Realty and Meinian Onehealth

Assuming the 90 days trading horizon Tianjin Realty Development is expected to under-perform the Meinian Onehealth. In addition to that, Tianjin Realty is 2.69 times more volatile than Meinian Onehealth Healthcare. It trades about -0.19 of its total potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about -0.27 per unit of volatility. If you would invest  477.00  in Meinian Onehealth Healthcare on October 24, 2024 and sell it today you would lose (42.00) from holding Meinian Onehealth Healthcare or give up 8.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Tianjin Realty Development  vs.  Meinian Onehealth Healthcare

Tianjin Realty Devel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Realty Development are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tianjin Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

Meinian Onehealth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Meinian Onehealth Healthcare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meinian Onehealth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Tianjin Realty and Meinian Onehealth

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

The idea behind Tianjin Realty Development and Meinian Onehealth Healthcare 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.