Correlation Between San Neng and Senao Networks
Can any of the company-specific risk be diversified away by investing in both San Neng and Senao Networks 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 San Neng and Senao Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Neng Group and Senao Networks, you can compare the effects of market volatilities on San Neng and Senao Networks 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 San Neng with a short position of Senao Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Neng and Senao Networks.
Diversification Opportunities for San Neng and Senao Networks
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between San and Senao is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding San Neng Group and Senao Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao Networks and San Neng 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 San Neng Group are associated (or correlated) with Senao Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao Networks has no effect on the direction of San Neng i.e., San Neng and Senao Networks go up and down completely randomly.
Pair Corralation between San Neng and Senao Networks
Assuming the 90 days trading horizon San Neng Group is expected to under-perform the Senao Networks. But the stock apears to be less risky and, when comparing its historical volatility, San Neng Group is 8.27 times less risky than Senao Networks. The stock trades about -0.19 of its potential returns per unit of risk. The Senao Networks is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 14,550 in Senao Networks on August 30, 2024 and sell it today you would earn a total of 5,350 from holding Senao Networks or generate 36.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
San Neng Group vs. Senao Networks
Performance |
| Timeline |
| San Neng Group |
| Senao Networks |
San Neng and Senao Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Neng and Senao Networks
The main advantage of trading using opposite San Neng and Senao Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Neng position performs unexpectedly, Senao Networks 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 Senao Networks will offset losses from the drop in Senao Networks' long position.The idea behind San Neng Group and Senao Networks 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.| Senao Networks vs. Group Up Industrial | Senao Networks vs. Wiwynn Corp | Senao Networks vs. Senao International Co | Senao Networks vs. San Neng Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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