Correlation Between Steven Madden and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Steven Madden 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 Steven Madden and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Senmiao Technology, you can compare the effects of market volatilities on Steven Madden 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 Steven Madden with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Senmiao Technology.
Diversification Opportunities for Steven Madden and Senmiao Technology
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steven and Senmiao is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Senmiao Technology go up and down completely randomly.
Pair Corralation between Steven Madden and Senmiao Technology
Given the investment horizon of 90 days Steven Madden is expected to under-perform the Senmiao Technology. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 2.28 times less risky than Senmiao Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Senmiao Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Senmiao Technology or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Senmiao Technology
Performance |
| Timeline |
| Steven Madden |
| Senmiao Technology |
Steven Madden and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Senmiao Technology
The main advantage of trading using opposite Steven Madden and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Senmiao Technology vs. SLM Corp | Senmiao Technology vs. Orix Corp Ads | Senmiao Technology vs. FirstCash | Senmiao Technology vs. Medallion Financial Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |