Correlation Between Senmiao Technology and Dream Finders
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Dream Finders 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 Dream Finders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Dream Finders Homes, you can compare the effects of market volatilities on Senmiao Technology and Dream Finders 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 Dream Finders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Dream Finders.
Diversification Opportunities for Senmiao Technology and Dream Finders
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Senmiao and Dream is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Dream Finders Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Finders Homes 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 Dream Finders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Finders Homes has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Dream Finders go up and down completely randomly.
Pair Corralation between Senmiao Technology and Dream Finders
Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.64 times less return on investment than Dream Finders. In addition to that, Senmiao Technology is 1.66 times more volatile than Dream Finders Homes. It trades about 0.03 of its total potential returns per unit of risk. Dream Finders Homes is currently generating about 0.07 per unit of volatility. If you would invest 1,275 in Dream Finders Homes on August 27, 2024 and sell it today you would earn a total of 1,890 from holding Dream Finders Homes or generate 148.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Dream Finders Homes
Performance |
| Timeline |
| Senmiao Technology |
| Dream Finders Homes |
Senmiao Technology and Dream Finders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Dream Finders
The main advantage of trading using opposite Senmiao Technology and Dream Finders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Dream Finders 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 Dream Finders will offset losses from the drop in Dream Finders' long position.| Senmiao Technology vs. SLM Corp | Senmiao Technology vs. Orix Corp Ads | Senmiao Technology vs. FirstCash | Senmiao Technology vs. Medallion Financial Corp |
| Dream Finders vs. Arhaus Inc | Dream Finders vs. Floor Decor Holdings | Dream Finders vs. Kingfisher plc | Dream Finders vs. Haverty Furniture Companies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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