Correlation Between Sensient Technologies and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies 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 Sensient Technologies and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Senmiao Technology, you can compare the effects of market volatilities on Sensient Technologies 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 Sensient Technologies with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Senmiao Technology.
Diversification Opportunities for Sensient Technologies and Senmiao Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensient and Senmiao is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Sensient Technologies 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 Sensient Technologies 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 Sensient Technologies i.e., Sensient Technologies and Senmiao Technology go up and down completely randomly.
Pair Corralation between Sensient Technologies and Senmiao Technology
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.43 times more return on investment than Senmiao Technology. However, Sensient Technologies is 2.35 times less risky than Senmiao Technology. It trades about 0.1 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.02 per unit of risk. If you would invest 7,507 in Sensient Technologies on September 1, 2024 and sell it today you would earn a total of 257.00 from holding Sensient Technologies or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Senmiao Technology
Performance |
| Timeline |
| Sensient Technologies |
| Senmiao Technology |
Sensient Technologies and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Senmiao Technology
The main advantage of trading using opposite Sensient Technologies and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies 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.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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