Correlation Between Perseus Mining and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Perseus Mining 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 Perseus Mining and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining Limited and Senmiao Technology, you can compare the effects of market volatilities on Perseus Mining 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 Perseus Mining with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Senmiao Technology.
Diversification Opportunities for Perseus Mining and Senmiao Technology
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perseus and Senmiao is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Perseus Mining 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 Perseus Mining Limited 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 Perseus Mining i.e., Perseus Mining and Senmiao Technology go up and down completely randomly.
Pair Corralation between Perseus Mining and Senmiao Technology
Assuming the 90 days horizon Perseus Mining is expected to generate 1.8 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Perseus Mining Limited is 1.85 times less risky than Senmiao Technology. It trades about 0.03 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Senmiao Technology on August 30, 2024 and sell it today you would lose (4.55) from holding Senmiao Technology or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
Perseus Mining Limited vs. Senmiao Technology
Performance |
| Timeline |
| Perseus Mining |
| Senmiao Technology |
Perseus Mining and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Senmiao Technology
The main advantage of trading using opposite Perseus Mining and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining 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.| Perseus Mining vs. Vertiv Holdings Co | Perseus Mining vs. Nasdaq Inc | Perseus Mining vs. McDonalds | Perseus Mining vs. Walmart |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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