Correlation Between Empresa Distribuidora and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Empresa Distribuidora and Senmiao Technology 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 Empresa Distribuidora and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Distribuidora y and Senmiao Technology, you can compare the effects of market volatilities on Empresa Distribuidora and Senmiao Technology 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 Empresa Distribuidora with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and Senmiao Technology.
Diversification Opportunities for Empresa Distribuidora and Senmiao Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empresa and Senmiao is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Empresa Distribuidora 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 Empresa Distribuidora y are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and Senmiao Technology go up and down completely randomly.
Pair Corralation between Empresa Distribuidora and Senmiao Technology
Considering the 90-day investment horizon Empresa Distribuidora y is expected to under-perform the Senmiao Technology. In addition to that, Empresa Distribuidora is 1.24 times more volatile than Senmiao Technology. It trades about -0.03 of its total potential returns per unit of risk. Senmiao Technology is currently generating about 0.21 per unit of volatility. If you would invest 91.00 in Senmiao Technology on October 7, 2024 and sell it today you would earn a total of 12.00 from holding Senmiao Technology or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empresa Distribuidora y vs. Senmiao Technology
Performance |
| Timeline |
| Empresa Distribuidora |
| Senmiao Technology |
Empresa Distribuidora and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empresa Distribuidora and Senmiao Technology
The main advantage of trading using opposite Empresa Distribuidora and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Empresa Distribuidora vs. Centrais Electricas Brasileiras | Empresa Distribuidora vs. Enel Chile SA | Empresa Distribuidora vs. Korea Electric Power | Empresa Distribuidora vs. Genie Energy |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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