Correlation Between NVIDIA and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Senmiao Technology, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Senmiao Technology.
Diversification Opportunities for NVIDIA and Senmiao Technology
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NVIDIA and Senmiao is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Senmiao Technology go up and down completely randomly.
Pair Corralation between NVIDIA and Senmiao Technology
Given the investment horizon of 90 days NVIDIA is expected to generate 0.54 times more return on investment than Senmiao Technology. However, NVIDIA is 1.84 times less risky than Senmiao Technology. It trades about -0.14 of its potential returns per unit of risk. Senmiao Technology is currently generating about -0.09 per unit of risk. If you would invest 14,525 in NVIDIA on September 12, 2024 and sell it today you would lose (1,018) from holding NVIDIA or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Senmiao Technology
Performance |
| Timeline |
| NVIDIA |
| Senmiao Technology |
NVIDIA and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Senmiao Technology
The main advantage of trading using opposite NVIDIA and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Senmiao Technology vs. Victory Integrity Smallmid Cap | Senmiao Technology vs. Hilton Worldwide Holdings | Senmiao Technology vs. NVIDIA | Senmiao Technology vs. JPMorgan Chase Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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