Correlation Between Federal Agricultural and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Senmiao 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 Federal Agricultural and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and Senmiao Technology, you can compare the effects of market volatilities on Federal Agricultural and Senmiao 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 Federal Agricultural with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Senmiao Technology.
Diversification Opportunities for Federal Agricultural and Senmiao Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Senmiao is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Federal Agricultural 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 Federal Agricultural Mortgage are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Senmiao Technology go up and down completely randomly.
Pair Corralation between Federal Agricultural and Senmiao Technology
Assuming the 90 days horizon Federal Agricultural Mortgage is expected to generate 33.36 times more return on investment than Senmiao Technology. However, Federal Agricultural is 33.36 times more volatile than Senmiao Technology. It trades about 0.16 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.03 per unit of risk. If you would invest 13,697 in Federal Agricultural Mortgage on August 29, 2024 and sell it today you would earn a total of 2,303 from holding Federal Agricultural Mortgage or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.57% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. Senmiao Technology
Performance |
| Timeline |
| Federal Agricultural |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Senmiao Technology |
Federal Agricultural and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and Senmiao Technology
The main advantage of trading using opposite Federal Agricultural and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Senmiao 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Federal Agricultural vs. Invesco High Income | Federal Agricultural vs. Blackrock Muniholdings Ny | Federal Agricultural vs. Nuveen California Select | Federal Agricultural vs. MFS Investment Grade |
| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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