Correlation Between Senmiao Technology and Duluth Holdings

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

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

Diversification Opportunities for Senmiao Technology and Duluth Holdings

-0.02

Correlation Coefficient

Senmiao Technology  Duluth Holdings

Good diversification

The 3 months correlation between Senmiao and Duluth is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings 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 Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Duluth Holdings go up and down completely randomly.

Pair Corralation between Senmiao Technology and Duluth Holdings

Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.46 times more return on investment than Duluth Holdings. However, Senmiao Technology is 1.46 times more volatile than Duluth Holdings. It trades about 0.0 of its potential returns per unit of risk. Duluth Holdings is currently generating about -0.09 per unit of risk. If you would invest  116.00  in Senmiao Technology on October 3, 2024 and sell it today you would lose (9.00) from holding Senmiao Technology or give up 7.76% of portfolio value over 90 days.

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

Senmiao Technology  vs.  Duluth Holdings

Senmiao Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senmiao Technology has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Senmiao Technology and Duluth Holdings

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

The idea behind Senmiao Technology and Duluth Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.