Correlation Between Senmiao Technology and SUPER HI

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

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

Diversification Opportunities for Senmiao Technology and SUPER HI

0.38

Correlation Coefficient

Senmiao Technology  SUPER HI

Weak diversification

The 3 months correlation between Senmiao and SUPER is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and SUPER HI go up and down completely randomly.

Pair Corralation between Senmiao Technology and SUPER HI

Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.18 times more return on investment than SUPER HI. However, Senmiao Technology is 1.18 times more volatile than SUPER HI INTERNATIONAL. It trades about -0.1 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about -0.29 per unit of risk. If you would invest  97.00  in Senmiao Technology on October 26, 2024 and sell it today you would lose (8.25) from holding Senmiao Technology or give up 8.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Senmiao Technology  vs.  SUPER HI INTERNATIONAL

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER HI INTERNATIONAL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, SUPER HI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Senmiao Technology and SUPER HI

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

The idea behind Senmiao Technology and SUPER HI INTERNATIONAL 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.