Correlation Between Senmiao Technology and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Barrick Gold 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 Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Barrick Gold Corp, you can compare the effects of market volatilities on Senmiao Technology and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Barrick Gold.
Diversification Opportunities for Senmiao Technology and Barrick Gold
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Senmiao and Barrick is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Barrick Gold go up and down completely randomly.
Pair Corralation between Senmiao Technology and Barrick Gold
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.12 times more return on investment than Barrick Gold. However, Senmiao Technology is 2.12 times more volatile than Barrick Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.29 per unit of risk. If you would invest 87.00 in Senmiao Technology on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Senmiao Technology or generate 2.3% 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. Barrick Gold Corp
Performance |
| Timeline |
| Senmiao Technology |
| Barrick Gold Corp |
Senmiao Technology and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Barrick Gold
The main advantage of trading using opposite Senmiao Technology and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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