Correlation Between Senmiao Technology and Alchemy Investments

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Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Alchemy Investments 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 Senmiao Technology and Alchemy Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and Alchemy Investments Acquisition, you can compare the effects of market volatilities on Senmiao Technology and Alchemy Investments 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 Senmiao Technology with a short position of Alchemy Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Alchemy Investments.

Diversification Opportunities for Senmiao Technology and Alchemy Investments

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Senmiao and Alchemy is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Alchemy Investments Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchemy Investments and Senmiao Technology 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 Senmiao Technology are associated (or correlated) with Alchemy Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchemy Investments has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Alchemy Investments go up and down completely randomly.

Pair Corralation between Senmiao Technology and Alchemy Investments

Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the Alchemy Investments. In addition to that, Senmiao Technology is 20.35 times more volatile than Alchemy Investments Acquisition. It trades about -0.07 of its total potential returns per unit of risk. Alchemy Investments Acquisition is currently generating about 0.28 per unit of volatility. If you would invest  1,094  in Alchemy Investments Acquisition on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Alchemy Investments Acquisition or generate 1.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Senmiao Technology  vs.  Alchemy Investments Acquisitio

 Performance 
       Timeline  
Senmiao Technology 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, Senmiao Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Alchemy Investments 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Alchemy Investments Acquisition are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Alchemy Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Senmiao Technology and Alchemy Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Senmiao Technology and Alchemy Investments

The main advantage of trading using opposite Senmiao Technology and Alchemy Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Alchemy Investments 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 Alchemy Investments will offset losses from the drop in Alchemy Investments' long position.
The idea behind Senmiao Technology and Alchemy Investments Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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