Correlation Between Senmiao Technology and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Algoma Steel 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 Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Algoma Steel Group, you can compare the effects of market volatilities on Senmiao Technology and Algoma Steel 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 Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Algoma Steel.
Diversification Opportunities for Senmiao Technology and Algoma Steel
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and Algoma is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group 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 Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Algoma Steel go up and down completely randomly.
Pair Corralation between Senmiao Technology and Algoma Steel
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.42 times more return on investment than Algoma Steel. However, Senmiao Technology is 2.42 times more volatile than Algoma Steel Group. It trades about 0.03 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.06 per unit of risk. If you would invest 90.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Senmiao Technology or generate 4.44% 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. Algoma Steel Group
Performance |
| Timeline |
| Senmiao Technology |
| Algoma Steel Group |
Senmiao Technology and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Algoma Steel
The main advantage of trading using opposite Senmiao Technology and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Algoma Steel vs. Labrador Gold Corp | Algoma Steel vs. Aurion Resources | Algoma Steel vs. Puma Exploration | Algoma Steel vs. Golden Star Resource |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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