Correlation Between Senmiao Technology and First Watch
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and First Watch 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 First Watch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and First Watch Restaurant, you can compare the effects of market volatilities on Senmiao Technology and First Watch 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 First Watch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and First Watch.
Diversification Opportunities for Senmiao Technology and First Watch
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Senmiao and First is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and First Watch Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Watch Restaurant 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 First Watch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Watch Restaurant has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and First Watch go up and down completely randomly.
Pair Corralation between Senmiao Technology and First Watch
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.18 times more return on investment than First Watch. However, Senmiao Technology is 2.18 times more volatile than First Watch Restaurant. It trades about 0.08 of its potential returns per unit of risk. First Watch Restaurant is currently generating about 0.01 per unit of risk. If you would invest 42.00 in Senmiao Technology on September 2, 2024 and sell it today you would earn a total of 47.00 from holding Senmiao Technology or generate 111.9% 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. First Watch Restaurant
Performance |
| Timeline |
| Senmiao Technology |
| First Watch Restaurant |
Senmiao Technology and First Watch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and First Watch
The main advantage of trading using opposite Senmiao Technology and First Watch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, First Watch 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 First Watch will offset losses from the drop in First Watch's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |