Correlation Between Senmiao Technology and Mader Group

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

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

Diversification Opportunities for Senmiao Technology and Mader Group

-0.58

Correlation Coefficient

Senmiao Technology  Mader Group

Excellent diversification

The 3 months correlation between Senmiao and Mader is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Mader Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mader Group Limited 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 Mader Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mader Group Limited has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Mader Group go up and down completely randomly.

Pair Corralation between Senmiao Technology and Mader Group

If you would invest  88.00  in Senmiao Technology on October 10, 2024 and sell it today you would earn a total of  9.00  from holding Senmiao Technology or generate 10.23% return on investment over 90 days.

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

Senmiao Technology  vs.  Mader Group Limited

Senmiao Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 2 (%) 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.

Mader Group Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Mader Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Senmiao Technology and Mader Group

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

The idea behind Senmiao Technology and Mader Group Limited 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.