Correlation Between CVR Partners and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both CVR Partners 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 CVR Partners and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Partners LP and Senmiao Technology, you can compare the effects of market volatilities on CVR Partners 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 CVR Partners with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Partners and Senmiao Technology.
Diversification Opportunities for CVR Partners and Senmiao Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVR and Senmiao is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and CVR Partners 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 CVR Partners LP 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 CVR Partners i.e., CVR Partners and Senmiao Technology go up and down completely randomly.
Pair Corralation between CVR Partners and Senmiao Technology
Considering the 90-day investment horizon CVR Partners is expected to generate 4.19 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, CVR Partners LP is 2.99 times less risky than Senmiao Technology. It trades about 0.03 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Senmiao Technology on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Senmiao Technology or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Partners LP vs. Senmiao Technology
Performance |
| Timeline |
| CVR Partners LP |
| Senmiao Technology |
CVR Partners and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Partners and Senmiao Technology
The main advantage of trading using opposite CVR Partners and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Partners 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.| CVR Partners vs. CF Industries Holdings | CVR Partners vs. The Mosaic | CVR Partners vs. American Vanguard | CVR Partners vs. ICL Israel Chemicals |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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