Correlation Between NioCorp Developments and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Senmiao Technology, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Senmiao Technology.
Diversification Opportunities for NioCorp Developments and Senmiao Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NioCorp and Senmiao is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Senmiao Technology go up and down completely randomly.
Pair Corralation between NioCorp Developments and Senmiao Technology
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 6.46 times more return on investment than Senmiao Technology. However, NioCorp Developments is 6.46 times more volatile than Senmiao Technology. It trades about 0.04 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.03 per unit of risk. If you would invest 92.00 in NioCorp Developments Ltd on November 1, 2024 and sell it today you would earn a total of 133.00 from holding NioCorp Developments Ltd or generate 144.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Senmiao Technology
Performance |
| Timeline |
| NioCorp Developments |
| Senmiao Technology |
NioCorp Developments and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Senmiao Technology
The main advantage of trading using opposite NioCorp Developments and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Grounded People Apparel | NioCorp Developments vs. Boot Barn Holdings | NioCorp Developments vs. Levi Strauss Co | NioCorp Developments vs. Triumph Apparel |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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