Correlation Between Senmiao Technology and Nasdaq
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Nasdaq 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 Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Nasdaq Inc, you can compare the effects of market volatilities on Senmiao Technology and Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Nasdaq.
Diversification Opportunities for Senmiao Technology and Nasdaq
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and Nasdaq is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Nasdaq go up and down completely randomly.
Pair Corralation between Senmiao Technology and Nasdaq
Given the investment horizon of 90 days Senmiao Technology is expected to generate 4.38 times more return on investment than Nasdaq. However, Senmiao Technology is 4.38 times more volatile than Nasdaq Inc. It trades about 0.03 of its potential returns per unit of risk. Nasdaq Inc is currently generating about 0.07 per unit of risk. If you would invest 90.00 in Senmiao Technology on November 9, 2024 and sell it today you would lose (1.00) from holding Senmiao Technology or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Nasdaq Inc
Performance |
| Timeline |
| Senmiao Technology |
| Nasdaq Inc |
Senmiao Technology and Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Nasdaq
The main advantage of trading using opposite Senmiao Technology and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq'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 Global Correlations module to find global opportunities by holding instruments from different markets.
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