Correlation Between Senmiao Technology and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and ArcelorMittal 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 ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and ArcelorMittal SA ADR, you can compare the effects of market volatilities on Senmiao Technology and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and ArcelorMittal.
Diversification Opportunities for Senmiao Technology and ArcelorMittal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and ArcelorMittal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA ADR has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and ArcelorMittal go up and down completely randomly.
Pair Corralation between Senmiao Technology and ArcelorMittal
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.73 times more return on investment than ArcelorMittal. However, Senmiao Technology is 2.73 times more volatile than ArcelorMittal SA ADR. It trades about 0.05 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.0 per unit of risk. If you would invest 81.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Senmiao Technology or generate 16.05% 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. ArcelorMittal SA ADR
Performance |
| Timeline |
| Senmiao Technology |
| ArcelorMittal SA ADR |
Senmiao Technology and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and ArcelorMittal
The main advantage of trading using opposite Senmiao Technology and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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