Correlation Between Tian Ruixiang and Selectquote

Can any of the company-specific risk be diversified away by investing in both Tian Ruixiang and Selectquote 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 Selectquote 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 Selectquote, you can compare the effects of market volatilities on Tian Ruixiang and Selectquote 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 Selectquote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tian Ruixiang and Selectquote.

Diversification Opportunities for Tian Ruixiang and Selectquote

0.34

Correlation Coefficient

Tian Ruixiang  Selectquote

Weak diversification

The 3 months correlation between Tian and Selectquote is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tian Ruixiang Holdings and Selectquote in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selectquote 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 Selectquote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selectquote has no effect on the direction of Tian Ruixiang i.e., Tian Ruixiang and Selectquote go up and down completely randomly.

Pair Corralation between Tian Ruixiang and Selectquote

Given the investment horizon of 90 days Tian Ruixiang Holdings is expected to under-perform the Selectquote. But the stock apears to be less risky and, when comparing its historical volatility, Tian Ruixiang Holdings is 1.32 times less risky than Selectquote. The stock trades about -0.09 of its potential returns per unit of risk. The Selectquote is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  383.00  in Selectquote on December 30, 2024 and sell it today you would lose (43.00) from holding Selectquote or give up 11.23% of portfolio value over 90 days.

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

Tian Ruixiang Holdings  vs.  Selectquote

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.

Selectquote

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selectquote has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Selectquote is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tian Ruixiang and Selectquote

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

The idea behind Tian Ruixiang Holdings and Selectquote 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.