Correlation Between Main Street and Tusimple Holdings

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

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

Diversification Opportunities for Main Street and Tusimple Holdings

-0.75

Correlation Coefficient

Main Street  Tusimple Holdings

Pay attention - limited upside

The 3 months correlation between Main and Tusimple is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Tusimple Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tusimple Holdings and Main Street 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 Main Street Capital are associated (or correlated) with Tusimple Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tusimple Holdings has no effect on the direction of Main Street i.e., Main Street and Tusimple Holdings go up and down completely randomly.

Pair Corralation between Main Street and Tusimple Holdings

Given the investment horizon of 90 days Main Street Capital is expected to generate 0.16 times more return on investment than Tusimple Holdings. However, Main Street Capital is 6.22 times less risky than Tusimple Holdings. It trades about 0.34 of its potential returns per unit of risk. Tusimple Holdings is currently generating about 0.0 per unit of risk. If you would invest  5,213  in Main Street Capital on May 5, 2025 and sell it today you would earn a total of  1,186  from holding Main Street Capital or generate 22.75% return on investment over 90 days.

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

Main Street Capital  vs.  Tusimple Holdings

Main Street Capital

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Main Street Capital are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Main Street displayed solid returns over the last few months and may actually be approaching a breakup point.

Tusimple Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tusimple Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Tusimple Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Main Street and Tusimple Holdings

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

The idea behind Main Street Capital and Tusimple 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 Stocks Directory module to find actively traded stocks across global markets.