Correlation Between Qudian and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Qudian 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 Qudian and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Senmiao Technology, you can compare the effects of market volatilities on Qudian 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 Qudian with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Senmiao Technology.
Diversification Opportunities for Qudian and Senmiao Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qudian and Senmiao is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Qudian 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 Qudian Inc 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 Qudian i.e., Qudian and Senmiao Technology go up and down completely randomly.
Pair Corralation between Qudian and Senmiao Technology
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 0.65 times more return on investment than Senmiao Technology. However, Qudian Inc is 1.54 times less risky than Senmiao Technology. It trades about 0.18 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.09 per unit of risk. If you would invest 226.00 in Qudian Inc on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Qudian Inc or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Qudian Inc vs. Senmiao Technology
Performance |
| Timeline |
| Qudian Inc |
| Senmiao Technology |
Qudian and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Senmiao Technology
The main advantage of trading using opposite Qudian and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian 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.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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