Correlation Between Senmiao Technology and Ryanair Holdings
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Ryanair Holdings 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 Ryanair Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Ryanair Holdings PLC, you can compare the effects of market volatilities on Senmiao Technology and Ryanair Holdings 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 Ryanair Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Ryanair Holdings.
Diversification Opportunities for Senmiao Technology and Ryanair Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and Ryanair is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Ryanair Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings PLC 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 Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings PLC has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Ryanair Holdings go up and down completely randomly.
Pair Corralation between Senmiao Technology and Ryanair Holdings
Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.0 times more return on investment than Ryanair Holdings. However, Senmiao Technology is 2.0 times more volatile than Ryanair Holdings PLC. It trades about 0.03 of its potential returns per unit of risk. Ryanair Holdings PLC is currently generating about -0.09 per unit of risk. If you would invest 88.00 in Senmiao Technology on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Senmiao Technology or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. Ryanair Holdings PLC
Performance |
| Timeline |
| Senmiao Technology |
| Ryanair Holdings PLC |
Senmiao Technology and Ryanair Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Ryanair Holdings
The main advantage of trading using opposite Senmiao Technology and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Ryanair Holdings 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 Ryanair Holdings will offset losses from the drop in Ryanair Holdings' long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
| Ryanair Holdings vs. Allegiant Travel | Ryanair Holdings vs. Azul SA | Ryanair Holdings vs. Alaska Air Group | Ryanair Holdings vs. International Consolidated Airlines |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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