Correlation Between Park National and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Park National 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 Park National and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park National and Senmiao Technology, you can compare the effects of market volatilities on Park National 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 Park National with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and Senmiao Technology.
Diversification Opportunities for Park National and Senmiao Technology
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Park and Senmiao is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Park National and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Park National 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 Park National 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 Park National i.e., Park National and Senmiao Technology go up and down completely randomly.
Pair Corralation between Park National and Senmiao Technology
Considering the 90-day investment horizon Park National is expected to generate 1.6 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Park National is 2.62 times less risky than Senmiao Technology. It trades about 0.05 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 90.00 in Senmiao Technology on November 9, 2024 and sell it today you would lose (1.00) from holding Senmiao Technology or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park National vs. Senmiao Technology
Performance |
| Timeline |
| Park National |
| Senmiao Technology |
Park National and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park National and Senmiao Technology
The main advantage of trading using opposite Park National and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park National 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.| Park National vs. Peoples Bancorp | Park National vs. Lakeland Financial | Park National vs. NBT Bancorp | Park National vs. Trustmark |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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