Correlation Between Tianrun Crankshaft and Allison Transmission

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Can any of the company-specific risk be diversified away by investing in both Tianrun Crankshaft and Allison Transmission 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 Tianrun Crankshaft and Allison Transmission into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tianrun Crankshaft Co and Allison Transmission Holdings, you can compare the effects of market volatilities on Tianrun Crankshaft and Allison Transmission 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 Tianrun Crankshaft with a short position of Allison Transmission. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianrun Crankshaft and Allison Transmission.

Diversification Opportunities for Tianrun Crankshaft and Allison Transmission

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Tianrun and Allison is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tianrun Crankshaft Co and Allison Transmission Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allison Transmission and Tianrun Crankshaft 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 Tianrun Crankshaft Co are associated (or correlated) with Allison Transmission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allison Transmission has no effect on the direction of Tianrun Crankshaft i.e., Tianrun Crankshaft and Allison Transmission go up and down completely randomly.

Pair Corralation between Tianrun Crankshaft and Allison Transmission

Assuming the 90 days trading horizon Tianrun Crankshaft Co is expected to under-perform the Allison Transmission. In addition to that, Tianrun Crankshaft is 1.1 times more volatile than Allison Transmission Holdings. It trades about -0.08 of its total potential returns per unit of risk. Allison Transmission Holdings is currently generating about 0.01 per unit of volatility. If you would invest  8,893  in Allison Transmission Holdings on September 4, 2025 and sell it today you would earn a total of  39.00  from holding Allison Transmission Holdings or generate 0.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy92.06%
ValuesDaily Returns

Tianrun Crankshaft Co  vs.  Allison Transmission Holdings

 Performance 
       Timeline  
Tianrun Crankshaft 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Tianrun Crankshaft Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.
Allison Transmission 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Allison Transmission Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Allison Transmission is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Tianrun Crankshaft and Allison Transmission Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tianrun Crankshaft and Allison Transmission

The main advantage of trading using opposite Tianrun Crankshaft and Allison Transmission positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianrun Crankshaft position performs unexpectedly, Allison Transmission 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 Allison Transmission will offset losses from the drop in Allison Transmission's long position.
The idea behind Tianrun Crankshaft Co and Allison Transmission 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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