Correlation Between Senmiao Technology and Beneficient

Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and Beneficient 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 Beneficient into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Senmiao Technology and Beneficient Class A, you can compare the effects of market volatilities on Senmiao Technology and Beneficient 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 Beneficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Beneficient.

Diversification Opportunities for Senmiao Technology and Beneficient

-0.28

Correlation Coefficient

Senmiao Technology  Beneficient

Very good diversification

The 3 months correlation between Senmiao and Beneficient is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Beneficient Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beneficient Class 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 Beneficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beneficient Class has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Beneficient go up and down completely randomly.

Pair Corralation between Senmiao Technology and Beneficient

Given the investment horizon of 90 days Senmiao Technology is expected to generate 0.62 times more return on investment than Beneficient. However, Senmiao Technology is 1.6 times less risky than Beneficient. It trades about 0.02 of its potential returns per unit of risk. Beneficient Class A is currently generating about -0.16 per unit of risk. If you would invest  86.00  in Senmiao Technology on October 25, 2024 and sell it today you would earn a total of  0.50  from holding Senmiao Technology or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Senmiao Technology  vs.  Beneficient Class A

Senmiao Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Senmiao Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Beneficient Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beneficient Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Senmiao Technology and Beneficient

The main advantage of trading using opposite Senmiao Technology and Beneficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, Beneficient 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 Beneficient will offset losses from the drop in Beneficient's long position.

The idea behind Senmiao Technology and Beneficient Class A 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.