Correlation Between Senao Networks and Planet Technology
Can any of the company-specific risk be diversified away by investing in both Senao Networks and Planet Technology 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 Senao Networks and Planet Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao Networks and Planet Technology, you can compare the effects of market volatilities on Senao Networks and Planet Technology 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 Senao Networks with a short position of Planet Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao Networks and Planet Technology.
Diversification Opportunities for Senao Networks and Planet Technology
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senao and Planet is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Senao Networks and Planet Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Technology and Senao Networks 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 Senao Networks are associated (or correlated) with Planet Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Technology has no effect on the direction of Senao Networks i.e., Senao Networks and Planet Technology go up and down completely randomly.
Pair Corralation between Senao Networks and Planet Technology
Assuming the 90 days trading horizon Senao Networks is expected to generate 6.04 times less return on investment than Planet Technology. In addition to that, Senao Networks is 1.25 times more volatile than Planet Technology. It trades about 0.01 of its total potential returns per unit of risk. Planet Technology is currently generating about 0.07 per unit of volatility. If you would invest 8,373 in Planet Technology on September 3, 2024 and sell it today you would earn a total of 7,477 from holding Planet Technology or generate 89.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senao Networks vs. Planet Technology
Performance |
| Timeline |
| Senao Networks |
| Planet Technology |
Senao Networks and Planet Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senao Networks and Planet Technology
The main advantage of trading using opposite Senao Networks and Planet Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao Networks position performs unexpectedly, Planet Technology 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 Planet Technology will offset losses from the drop in Planet Technology's long position.| Senao Networks vs. Accton Technology Corp | Senao Networks vs. Wistron NeWeb Corp | Senao Networks vs. Alpha Networks | Senao Networks vs. Gemtek Technology Co |
| Planet Technology vs. Accton Technology Corp | Planet Technology vs. Wistron NeWeb Corp | Planet Technology vs. Alpha Networks | Planet Technology vs. Gemtek Technology Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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