Correlation Between Arhaus and Tongxin International

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

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

Diversification Opportunities for Arhaus and Tongxin International

0.0

Correlation Coefficient

Arhaus  Tongxin International

Pay attention - limited upside

The 3 months correlation between Arhaus and Tongxin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Tongxin International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxin International and Arhaus 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 Arhaus Inc are associated (or correlated) with Tongxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxin International has no effect on the direction of Arhaus i.e., Arhaus and Tongxin International go up and down completely randomly.

Pair Corralation between Arhaus and Tongxin International

If you would invest  941.00  in Arhaus Inc on October 26, 2024 and sell it today you would earn a total of  271.00  from holding Arhaus Inc or generate 28.8% return on investment over 90 days.

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

Arhaus Inc  vs.  Tongxin International

Arhaus Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tongxin International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tongxin International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Tongxin International is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Arhaus and Tongxin International

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

The idea behind Arhaus Inc and Tongxin International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.