Correlation Between Senmiao Technology and Air Transport
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Air Transport 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 Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Air Transport Services, you can compare the effects of market volatilities on Senmiao Technology and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Air Transport.
Diversification Opportunities for Senmiao Technology and Air Transport
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Senmiao and Air is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Air Transport go up and down completely randomly.
Pair Corralation between Senmiao Technology and Air Transport
Given the investment horizon of 90 days Senmiao Technology is expected to generate 8.93 times less return on investment than Air Transport. But when comparing it to its historical volatility, Senmiao Technology is 1.3 times less risky than Air Transport. It trades about 0.03 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,720 in Air Transport Services on August 29, 2024 and sell it today you would earn a total of 477.00 from holding Air Transport Services or generate 27.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Air Transport Services
Performance |
| Timeline |
| Senmiao Technology |
| Air Transport Services |
Senmiao Technology and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Air Transport
The main advantage of trading using opposite Senmiao Technology and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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