Correlation Between Senao Networks and Auden Techno
Can any of the company-specific risk be diversified away by investing in both Senao Networks and Auden Techno 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 Senao Networks and Auden Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao Networks and Auden Techno, you can compare the effects of market volatilities on Senao Networks and Auden Techno 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 Senao Networks with a short position of Auden Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao Networks and Auden Techno.
Diversification Opportunities for Senao Networks and Auden Techno
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senao and Auden is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Senao Networks and Auden Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auden Techno and Senao Networks 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 Senao Networks are associated (or correlated) with Auden Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auden Techno has no effect on the direction of Senao Networks i.e., Senao Networks and Auden Techno go up and down completely randomly.
Pair Corralation between Senao Networks and Auden Techno
Assuming the 90 days trading horizon Senao Networks is expected to generate 1.36 times more return on investment than Auden Techno. However, Senao Networks is 1.36 times more volatile than Auden Techno. It trades about -0.01 of its potential returns per unit of risk. Auden Techno is currently generating about -0.02 per unit of risk. If you would invest 32,350 in Senao Networks on December 5, 2024 and sell it today you would lose (7,800) from holding Senao Networks or give up 24.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Senao Networks vs. Auden Techno
Performance |
Timeline |
Senao Networks |
Auden Techno |
Senao Networks and Auden Techno Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senao Networks and Auden Techno
The main advantage of trading using opposite Senao Networks and Auden Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao Networks position performs unexpectedly, Auden Techno 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 Auden Techno will offset losses from the drop in Auden Techno's long position.Senao Networks vs. Group Up Industrial | Senao Networks vs. Wiwynn Corp | Senao Networks vs. Senao International Co | Senao Networks vs. San Neng Group |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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