Correlation Between Arthur J and Tian Ruixiang

Can any of the company-specific risk be diversified away by investing in both Arthur J and Tian Ruixiang 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 Arthur J and Tian Ruixiang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arthur J Gallagher and Tian Ruixiang Holdings, you can compare the effects of market volatilities on Arthur J and Tian Ruixiang 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 Arthur J with a short position of Tian Ruixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthur J and Tian Ruixiang.

Diversification Opportunities for Arthur J and Tian Ruixiang

-0.11

Correlation Coefficient

Arthur J  Tian Ruixiang

Good diversification

The 3 months correlation between Arthur and Tian is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Arthur J Gallagher and Tian Ruixiang Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tian Ruixiang Holdings and Arthur J 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 Arthur J Gallagher are associated (or correlated) with Tian Ruixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tian Ruixiang Holdings has no effect on the direction of Arthur J i.e., Arthur J and Tian Ruixiang go up and down completely randomly.

Pair Corralation between Arthur J and Tian Ruixiang

Considering the 90-day investment horizon Arthur J Gallagher is expected to under-perform the Tian Ruixiang. But the stock apears to be less risky and, when comparing its historical volatility, Arthur J Gallagher is 5.72 times less risky than Tian Ruixiang. The stock trades about -0.16 of its potential returns per unit of risk. The Tian Ruixiang Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Tian Ruixiang Holdings on October 8, 2024 and sell it today you would earn a total of  25.00  from holding Tian Ruixiang Holdings or generate 15.34% return on investment over 90 days.

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

Arthur J Gallagher  vs.  Tian Ruixiang Holdings

Arthur J Gallagher

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arthur J Gallagher has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Tian Ruixiang Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tian Ruixiang Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tian Ruixiang may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Arthur J and Tian Ruixiang

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

The idea behind Arthur J Gallagher and Tian Ruixiang Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.