Correlation Between Senmiao Technology and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and ServiceNow 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 ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and ServiceNow, you can compare the effects of market volatilities on Senmiao Technology and ServiceNow 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 ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and ServiceNow.
Diversification Opportunities for Senmiao Technology and ServiceNow
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Senmiao and ServiceNow is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow 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 ServiceNow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServiceNow has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and ServiceNow go up and down completely randomly.
Pair Corralation between Senmiao Technology and ServiceNow
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.5 times more return on investment than ServiceNow. However, Senmiao Technology is 2.5 times more volatile than ServiceNow. It trades about 0.07 of its potential returns per unit of risk. ServiceNow is currently generating about 0.08 per unit of risk. If you would invest 47.00 in Senmiao Technology on October 24, 2024 and sell it today you would earn a total of 39.00 from holding Senmiao Technology or generate 82.98% 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. ServiceNow
Performance |
| Timeline |
| Senmiao Technology |
| ServiceNow |
Senmiao Technology and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and ServiceNow
The main advantage of trading using opposite Senmiao Technology and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, ServiceNow 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 ServiceNow will offset losses from the drop in ServiceNow's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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