Correlation Between Tian Ruixiang and Brown Brown

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

Diversification Opportunities for Tian Ruixiang and Brown Brown

0.7

Correlation Coefficient

Tian Ruixiang  Brown Brown

Poor diversification

The 3 months correlation between Tian and Brown is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tian Ruixiang Holdings and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown 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 Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of Tian Ruixiang i.e., Tian Ruixiang and Brown Brown go up and down completely randomly.

Pair Corralation between Tian Ruixiang and Brown Brown

Given the investment horizon of 90 days Tian Ruixiang Holdings is expected to under-perform the Brown Brown. In addition to that, Tian Ruixiang is 2.77 times more volatile than Brown Brown. It trades about -0.11 of its total potential returns per unit of risk. Brown Brown is currently generating about -0.16 per unit of volatility. If you would invest  11,023  in Brown Brown on May 6, 2025 and sell it today you would lose (1,799) from holding Brown Brown or give up 16.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Tian Ruixiang Holdings  vs.  Brown Brown

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 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.

Brown Brown

Risk-Adjusted Performance

Very Weak

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.

Pair Trading with Tian Ruixiang and Brown Brown

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

The idea behind Tian Ruixiang Holdings and Brown Brown 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.