Correlation Between Orix Corp and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Orix Corp 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 Orix Corp and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orix Corp Ads and Senmiao Technology, you can compare the effects of market volatilities on Orix Corp 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 Orix Corp with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orix Corp and Senmiao Technology.
Diversification Opportunities for Orix Corp and Senmiao Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orix and Senmiao is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Orix Corp 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 Orix Corp Ads 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 Orix Corp i.e., Orix Corp and Senmiao Technology go up and down completely randomly.
Pair Corralation between Orix Corp and Senmiao Technology
Allowing for the 90-day total investment horizon Orix Corp is expected to generate 2.3 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Orix Corp Ads is 3.02 times less risky than Senmiao Technology. It trades about 0.08 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Senmiao Technology on August 24, 2024 and sell it today you would earn a total of 3.20 from holding Senmiao Technology or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orix Corp Ads vs. Senmiao Technology
Performance |
| Timeline |
| Orix Corp Ads |
| Senmiao Technology |
Orix Corp and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orix Corp and Senmiao Technology
The main advantage of trading using opposite Orix Corp and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp 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.| Orix Corp vs. Atlanticus Holdings Corp | Orix Corp vs. Nelnet Inc | Orix Corp vs. EZCORP Inc | Orix Corp vs. SLM Corp |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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