Correlation Between Barrick Gold and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Barrick Gold 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 Barrick Gold and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrick Gold Corp and Senmiao Technology, you can compare the effects of market volatilities on Barrick Gold 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 Barrick Gold with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Senmiao Technology.
Diversification Opportunities for Barrick Gold and Senmiao Technology
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barrick and Senmiao is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Barrick Gold 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 Barrick Gold Corp 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 Barrick Gold i.e., Barrick Gold and Senmiao Technology go up and down completely randomly.
Pair Corralation between Barrick Gold and Senmiao Technology
Given the investment horizon of 90 days Barrick Gold is expected to generate 13.31 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Barrick Gold Corp is 2.87 times less risky than Senmiao Technology. It trades about 0.02 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Senmiao Technology on September 2, 2024 and sell it today you would earn a total of 47.00 from holding Senmiao Technology or generate 111.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Senmiao Technology
Performance |
| Timeline |
| Barrick Gold Corp |
| Senmiao Technology |
Barrick Gold and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Senmiao Technology
The main advantage of trading using opposite Barrick Gold and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold 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.| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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