Correlation Between Senmiao Technology and KeyCorp

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

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

Diversification Opportunities for Senmiao Technology and KeyCorp

0.13

Correlation Coefficient

Senmiao Technology  KeyCorp

Average diversification

The 3 months correlation between Senmiao and KeyCorp is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and KeyCorp go up and down completely randomly.

Pair Corralation between Senmiao Technology and KeyCorp

Given the investment horizon of 90 days Senmiao Technology is expected to generate 5.11 times more return on investment than KeyCorp. However, Senmiao Technology is 5.11 times more volatile than KeyCorp. It trades about 0.08 of its potential returns per unit of risk. KeyCorp is currently generating about 0.07 per unit of risk. If you would invest  41.00  in Senmiao Technology on September 24, 2024 and sell it today you would earn a total of  48.80  from holding Senmiao Technology or generate 119.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Senmiao Technology  vs.  KeyCorp

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 abnormal performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KeyCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KeyCorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, KeyCorp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Senmiao Technology and KeyCorp

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

The idea behind Senmiao Technology and KeyCorp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.