Correlation Between Brown Brown and Tian Ruixiang

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

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

Diversification Opportunities for Brown Brown and Tian Ruixiang

0.72

Correlation Coefficient

Brown Brown  Tian Ruixiang

Poor diversification

The 3 months correlation between Brown and Tian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Brown Brown 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 Brown Brown 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 Brown Brown 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 Brown Brown i.e., Brown Brown and Tian Ruixiang go up and down completely randomly.

Pair Corralation between Brown Brown and Tian Ruixiang

Considering the 90-day investment horizon Brown Brown is expected to generate 0.36 times more return on investment than Tian Ruixiang. However, Brown Brown is 2.75 times less risky than Tian Ruixiang. It trades about -0.16 of its potential returns per unit of risk. Tian Ruixiang Holdings is currently generating about -0.11 per unit of risk. If you would invest  11,106  in Brown Brown on May 7, 2025 and sell it today you would lose (1,836) from holding Brown Brown or give up 16.53% of portfolio value over 90 days.

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

Brown Brown  vs.  Tian Ruixiang Holdings

Brown Brown

Risk-Adjusted Performance

Weakest

Over the last 90 days Brown Brown has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tian Ruixiang Holdings

Risk-Adjusted Performance

Weakest

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Brown Brown and Tian Ruixiang

The main advantage of trading using opposite Brown Brown and Tian Ruixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Brown 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 Brown Brown 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.