Correlation Between Reliance Global and Tian Ruixiang

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

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

Diversification Opportunities for Reliance Global and Tian Ruixiang

0.68

Correlation Coefficient

Reliance Global  Tian Ruixiang

Poor diversification

The 3 months correlation between Reliance and Tian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Global Group 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 Reliance Global 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 Reliance Global Group 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 Reliance Global i.e., Reliance Global and Tian Ruixiang go up and down completely randomly.

Pair Corralation between Reliance Global and Tian Ruixiang

Given the investment horizon of 90 days Reliance Global Group is expected to generate 4.0 times more return on investment than Tian Ruixiang. However, Reliance Global is 4.0 times more volatile than Tian Ruixiang Holdings. It trades about 0.08 of its potential returns per unit of risk. Tian Ruixiang Holdings is currently generating about 0.02 per unit of risk. If you would invest  216.00  in Reliance Global Group on October 9, 2024 and sell it today you would earn a total of  54.00  from holding Reliance Global Group or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Reliance Global Group  vs.  Tian Ruixiang Holdings

Reliance Global Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reliance Global Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Reliance Global demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Tian Ruixiang Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tian Ruixiang Holdings are ranked lower than 1 (%) 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 Reliance Global and Tian Ruixiang

The main advantage of trading using opposite Reliance Global and Tian Ruixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Global 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 Reliance Global Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.