Correlation Between Senmiao Technology and Yirendai
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Yirendai 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 Yirendai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Yirendai, you can compare the effects of market volatilities on Senmiao Technology and Yirendai 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 Yirendai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Yirendai.
Diversification Opportunities for Senmiao Technology and Yirendai
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senmiao and Yirendai is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Yirendai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yirendai 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 Yirendai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yirendai has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Yirendai go up and down completely randomly.
Pair Corralation between Senmiao Technology and Yirendai
Given the investment horizon of 90 days Senmiao Technology is expected to generate 0.82 times more return on investment than Yirendai. However, Senmiao Technology is 1.23 times less risky than Yirendai. It trades about 0.09 of its potential returns per unit of risk. Yirendai is currently generating about -0.19 per unit of risk. If you would invest 88.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Senmiao Technology or generate 6.82% 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. Yirendai
Performance |
| Timeline |
| Senmiao Technology |
| Yirendai |
Senmiao Technology and Yirendai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and Yirendai
The main advantage of trading using opposite Senmiao Technology and Yirendai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Yirendai 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 Yirendai will offset losses from the drop in Yirendai's long position.| Senmiao Technology vs. SLM Corp | Senmiao Technology vs. Orix Corp Ads | Senmiao Technology vs. FirstCash | Senmiao Technology vs. Medallion Financial Corp |
| Yirendai vs. Lexinfintech Holdings | Yirendai vs. FinVolution Group | Yirendai vs. 360 Finance | Yirendai vs. Navient Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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