Correlation Between Visa and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Senmiao Technology, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Senmiao Technology.
Diversification Opportunities for Visa and Senmiao Technology
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Senmiao is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Visa 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 Visa Class A 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 Visa i.e., Visa and Senmiao Technology go up and down completely randomly.
Pair Corralation between Visa and Senmiao Technology
Taking into account the 90-day investment horizon Visa is expected to generate 4.01 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Visa Class A is 6.33 times less risky than Senmiao Technology. It trades about 0.08 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Senmiao Technology on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Senmiao Technology or generate 67.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Senmiao Technology
Performance |
| Timeline |
| Visa Class A |
| Senmiao Technology |
Visa and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Senmiao Technology
The main advantage of trading using opposite Visa and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |