Correlation Between Senmiao Technology and Spyre Therapeutics

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

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

Diversification Opportunities for Senmiao Technology and Spyre Therapeutics

-0.34

Correlation Coefficient

Senmiao Technology  Spyre Therapeutics

Very good diversification

The 3 months correlation between Senmiao and Spyre is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics 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 Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Senmiao Technology and Spyre Therapeutics

Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.13 times more return on investment than Spyre Therapeutics. However, Senmiao Technology is 1.13 times more volatile than Spyre Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  88.00  in Senmiao Technology on September 12, 2024 and sell it today you would lose (0.50) from holding Senmiao Technology or give up 0.57% 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.  Spyre Therapeutics

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 weak 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.

Spyre Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spyre Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Spyre Therapeutics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Senmiao Technology and Spyre Therapeutics

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

The idea behind Senmiao Technology and Spyre Therapeutics 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.