Correlation Between Tingyi Holding and TaiMed Biologics

Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and TaiMed Biologics 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 Tingyi Holding and TaiMed Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tingyi Holding Corp and TaiMed Biologics, you can compare the effects of market volatilities on Tingyi Holding and TaiMed Biologics 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 Tingyi Holding with a short position of TaiMed Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and TaiMed Biologics.

Diversification Opportunities for Tingyi Holding and TaiMed Biologics

-0.73

Correlation Coefficient

Tingyi Holding  TaiMed Biologics

Pay attention - limited upside

The 3 months correlation between Tingyi and TaiMed is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and TaiMed Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TaiMed Biologics and Tingyi Holding 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 Tingyi Holding Corp are associated (or correlated) with TaiMed Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TaiMed Biologics has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and TaiMed Biologics go up and down completely randomly.

Pair Corralation between Tingyi Holding and TaiMed Biologics

Assuming the 90 days trading horizon Tingyi Holding Corp is expected to under-perform the TaiMed Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Tingyi Holding Corp is 1.25 times less risky than TaiMed Biologics. The stock trades about -0.12 of its potential returns per unit of risk. The TaiMed Biologics is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  8,500  in TaiMed Biologics on September 24, 2024 and sell it today you would lose (290.00) from holding TaiMed Biologics or give up 3.41% of portfolio value over 90 days.

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

Tingyi Holding Corp  vs.  TaiMed Biologics

Tingyi Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tingyi Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TaiMed Biologics

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Tingyi Holding and TaiMed Biologics

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

The idea behind Tingyi Holding Corp and TaiMed Biologics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.