Correlation Between Senmiao Technology and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Analog Devices 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 Senmiao Technology and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Analog Devices, you can compare the effects of market volatilities on Senmiao Technology and Analog Devices 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 Senmiao Technology with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Analog Devices.
Diversification Opportunities for Senmiao Technology and Analog Devices
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and Analog is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Senmiao Technology 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 Senmiao Technology are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Analog Devices go up and down completely randomly.
Pair Corralation between Senmiao Technology and Analog Devices
Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the Analog Devices. In addition to that, Senmiao Technology is 2.54 times more volatile than Analog Devices. It trades about -0.09 of its total potential returns per unit of risk. Analog Devices is currently generating about 0.13 per unit of volatility. If you would invest 21,489 in Analog Devices on October 23, 2024 and sell it today you would earn a total of 774.00 from holding Analog Devices or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Analog Devices
Performance |
| Timeline |
| Senmiao Technology |
| Analog Devices |
Senmiao Technology and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Analog Devices
The main advantage of trading using opposite Senmiao Technology and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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