Correlation Between Senmiao Technology and YTLBerhad
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and YTLBerhad 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 YTLBerhad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and YTL Berhad, you can compare the effects of market volatilities on Senmiao Technology and YTLBerhad 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 YTLBerhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and YTLBerhad.
Diversification Opportunities for Senmiao Technology and YTLBerhad
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Senmiao and YTLBerhad is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad 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 YTLBerhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and YTLBerhad go up and down completely randomly.
Pair Corralation between Senmiao Technology and YTLBerhad
Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.34 times less return on investment than YTLBerhad. In addition to that, Senmiao Technology is 1.56 times more volatile than YTL Berhad. It trades about 0.03 of its total potential returns per unit of risk. YTL Berhad is currently generating about 0.06 per unit of volatility. If you would invest 22.00 in YTL Berhad on August 29, 2024 and sell it today you would earn a total of 24.00 from holding YTL Berhad or generate 109.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. YTL Berhad
Performance |
| Timeline |
| Senmiao Technology |
| YTL Berhad |
Senmiao Technology and YTLBerhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and YTLBerhad
The main advantage of trading using opposite Senmiao Technology and YTLBerhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, YTLBerhad 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 YTLBerhad will offset losses from the drop in YTLBerhad's long position.| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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