Correlation Between Tian Ruixiang and Crawford

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

Diversification Opportunities for Tian Ruixiang and Crawford

0.42

Correlation Coefficient

Tian Ruixiang  Crawford

Very weak diversification

The 3 months correlation between Tian and Crawford is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tian Ruixiang Holdings and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford 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 Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of Tian Ruixiang i.e., Tian Ruixiang and Crawford go up and down completely randomly.

Pair Corralation between Tian Ruixiang and Crawford

Given the investment horizon of 90 days Tian Ruixiang Holdings is expected to under-perform the Crawford. In addition to that, Tian Ruixiang is 2.58 times more volatile than Crawford Company. It trades about -0.01 of its total potential returns per unit of risk. Crawford Company is currently generating about 0.04 per unit of volatility. If you would invest  713.00  in Crawford Company on February 3, 2024 and sell it today you would earn a total of  270.00  from holding Crawford Company or generate 37.87% return on investment over 90 days.

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

Tian Ruixiang Holdings  vs.  Crawford Company

Tian Ruixiang Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tian Ruixiang Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Tian Ruixiang showed solid returns over the last few months and may actually be approaching a breakup point.

Crawford

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tian Ruixiang and Crawford

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

The idea behind Tian Ruixiang Holdings and Crawford Company 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.