Correlation Between WEC Energy and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both WEC Energy 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 WEC Energy and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEC Energy Group and Senmiao Technology, you can compare the effects of market volatilities on WEC Energy 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 WEC Energy with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Senmiao Technology.
Diversification Opportunities for WEC Energy and Senmiao Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WEC and Senmiao is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and WEC Energy 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 WEC Energy Group 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 WEC Energy i.e., WEC Energy and Senmiao Technology go up and down completely randomly.
Pair Corralation between WEC Energy and Senmiao Technology
Considering the 90-day investment horizon WEC Energy Group is expected to under-perform the Senmiao Technology. But the stock apears to be less risky and, when comparing its historical volatility, WEC Energy Group is 4.63 times less risky than Senmiao Technology. The stock trades about -0.25 of its potential returns per unit of risk. The Senmiao Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Senmiao Technology on October 7, 2024 and sell it today you would earn a total of 12.00 from holding Senmiao Technology or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Senmiao Technology
Performance |
| Timeline |
| WEC Energy Group |
| Senmiao Technology |
WEC Energy and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Senmiao Technology
The main advantage of trading using opposite WEC Energy and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy 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.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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