Correlation Between Senmiao Technology and Edgewell Personal
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Edgewell Personal 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 Edgewell Personal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Edgewell Personal Care, you can compare the effects of market volatilities on Senmiao Technology and Edgewell Personal 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 Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Edgewell Personal.
Diversification Opportunities for Senmiao Technology and Edgewell Personal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senmiao and Edgewell is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care 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 Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Edgewell Personal go up and down completely randomly.
Pair Corralation between Senmiao Technology and Edgewell Personal
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.88 times more return on investment than Edgewell Personal. However, Senmiao Technology is 2.88 times more volatile than Edgewell Personal Care. It trades about 0.09 of its potential returns per unit of risk. Edgewell Personal Care is currently generating about 0.14 per unit of risk. If you would invest 88.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Senmiao Technology or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Edgewell Personal Care
Performance |
| Timeline |
| Senmiao Technology |
| Edgewell Personal Care |
Senmiao Technology and Edgewell Personal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Edgewell Personal
The main advantage of trading using opposite Senmiao Technology and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.| Senmiao Technology vs. SLM Corp | Senmiao Technology vs. Orix Corp Ads | Senmiao Technology vs. FirstCash | Senmiao Technology vs. Medallion Financial Corp |
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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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