Correlation Between Senmiao Technology and Enova International
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Enova International 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 Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Enova International, you can compare the effects of market volatilities on Senmiao Technology and Enova International 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 Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Enova International.
Diversification Opportunities for Senmiao Technology and Enova International
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Senmiao and Enova is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Enova International go up and down completely randomly.
Pair Corralation between Senmiao Technology and Enova International
Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.45 times less return on investment than Enova International. In addition to that, Senmiao Technology is 2.48 times more volatile than Enova International. It trades about 0.03 of its total potential returns per unit of risk. Enova International is currently generating about 0.1 per unit of volatility. If you would invest 3,963 in Enova International on August 24, 2024 and sell it today you would earn a total of 6,511 from holding Enova International or generate 164.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Enova International
Performance |
| Timeline |
| Senmiao Technology |
| Enova International |
Senmiao Technology and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Enova International
The main advantage of trading using opposite Senmiao Technology and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Enova International vs. Regional Management Corp | Enova International vs. Encore Capital Group | Enova International vs. Customers Bancorp | Enova International vs. Employers 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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