Correlation Between Tian Ruixiang and Marsh McLennan
Can any of the company-specific risk be diversified away by investing in both Tian Ruixiang and Marsh McLennan 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 Marsh McLennan 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 Marsh McLennan Companies, you can compare the effects of market volatilities on Tian Ruixiang and Marsh McLennan 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 Marsh McLennan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tian Ruixiang and Marsh McLennan.
Diversification Opportunities for Tian Ruixiang and Marsh McLennan
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tian and Marsh is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tian Ruixiang Holdings and Marsh McLennan Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsh McLennan Companies 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 Marsh McLennan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsh McLennan Companies has no effect on the direction of Tian Ruixiang i.e., Tian Ruixiang and Marsh McLennan go up and down completely randomly.
Pair Corralation between Tian Ruixiang and Marsh McLennan
Given the investment horizon of 90 days Tian Ruixiang Holdings is expected to under-perform the Marsh McLennan. In addition to that, Tian Ruixiang is 6.43 times more volatile than Marsh McLennan Companies. It trades about -0.05 of its total potential returns per unit of risk. Marsh McLennan Companies is currently generating about 0.13 per unit of volatility. If you would invest 20,289 in Marsh McLennan Companies on August 28, 2024 and sell it today you would earn a total of 2,782 from holding Marsh McLennan Companies or generate 13.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tian Ruixiang Holdings vs. Marsh McLennan Companies
Performance |
| Timeline |
| Tian Ruixiang Holdings |
| Marsh McLennan Companies |
Tian Ruixiang and Marsh McLennan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tian Ruixiang and Marsh McLennan
The main advantage of trading using opposite Tian Ruixiang and Marsh McLennan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tian Ruixiang position performs unexpectedly, Marsh McLennan 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 Marsh McLennan will offset losses from the drop in Marsh McLennan's long position.| Tian Ruixiang vs. Reliance Global Group | Tian Ruixiang vs. Selectquote | Tian Ruixiang vs. GoHealth | Tian Ruixiang vs. Brown Brown |
| Marsh McLennan vs. GoHealth | Marsh McLennan vs. Tian Ruixiang Holdings | Marsh McLennan vs. Huize Holding | Marsh McLennan vs. CorVel Corp |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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