Correlation Between Tootsie Roll and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Tootsie Roll 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 Tootsie Roll and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tootsie Roll Industries and Senmiao Technology, you can compare the effects of market volatilities on Tootsie Roll 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 Tootsie Roll with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and Senmiao Technology.
Diversification Opportunities for Tootsie Roll and Senmiao Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tootsie and Senmiao is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Tootsie Roll 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 Tootsie Roll Industries 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 Tootsie Roll i.e., Tootsie Roll and Senmiao Technology go up and down completely randomly.
Pair Corralation between Tootsie Roll and Senmiao Technology
Allowing for the 90-day total investment horizon Tootsie Roll Industries is expected to under-perform the Senmiao Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tootsie Roll Industries is 4.09 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 0.03 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Senmiao Technology on September 3, 2024 and sell it today you would lose (3.00) from holding Senmiao Technology or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tootsie Roll Industries vs. Senmiao Technology
Performance |
| Timeline |
| Tootsie Roll Industries |
| Senmiao Technology |
Tootsie Roll and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tootsie Roll and Senmiao Technology
The main advantage of trading using opposite Tootsie Roll and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tootsie Roll 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.| Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Rocky Mountain Chocolate | Tootsie Roll vs. Chocoladefabriken Lindt Sprngli |
| Senmiao Technology vs. Highway Holdings Limited | Senmiao Technology vs. QCR Holdings | Senmiao Technology vs. Partner Communications | Senmiao Technology vs. Acumen Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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