Correlation Between Tian Ruixiang and EHealth

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

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

Diversification Opportunities for Tian Ruixiang and EHealth

0.63

Correlation Coefficient

Tian Ruixiang  EHealth

Poor diversification

The 3 months correlation between Tian and EHealth is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tian Ruixiang Holdings and eHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eHealth and Tian Ruixiang 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 Tian Ruixiang Holdings are associated (or correlated) with EHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eHealth has no effect on the direction of Tian Ruixiang i.e., Tian Ruixiang and EHealth go up and down completely randomly.

Pair Corralation between Tian Ruixiang and EHealth

Given the investment horizon of 90 days Tian Ruixiang Holdings is expected to generate 1.09 times more return on investment than EHealth. However, Tian Ruixiang is 1.09 times more volatile than eHealth. It trades about -0.06 of its potential returns per unit of risk. eHealth is currently generating about -0.1 per unit of risk. If you would invest  173.00  in Tian Ruixiang Holdings on December 28, 2024 and sell it today you would lose (33.00) from holding Tian Ruixiang Holdings or give up 19.08% of portfolio value over 90 days.

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

Tian Ruixiang Holdings  vs.  eHealth

Tian Ruixiang Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tian Ruixiang Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

eHealth

Risk-Adjusted Performance

Very Weak

Over the last 90 days eHealth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Tian Ruixiang and EHealth

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

The idea behind Tian Ruixiang Holdings and eHealth 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.