Correlation Between Senmiao Technology and 12527GAE3

Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and 12527GAE3 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 12527GAE3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Senmiao Technology and CF INDS INC, you can compare the effects of market volatilities on Senmiao Technology and 12527GAE3 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 12527GAE3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and 12527GAE3.

Diversification Opportunities for Senmiao Technology and 12527GAE3

0.76

Correlation Coefficient

Senmiao Technology  12527GAE3

Poor diversification

The 3 months correlation between Senmiao and 12527GAE3 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and CF INDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF INDS INC 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 12527GAE3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF INDS INC has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and 12527GAE3 go up and down completely randomly.

Pair Corralation between Senmiao Technology and 12527GAE3

Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the 12527GAE3. In addition to that, Senmiao Technology is 2.2 times more volatile than CF INDS INC. It trades about -0.07 of its total potential returns per unit of risk. CF INDS INC is currently generating about -0.09 per unit of volatility. If you would invest  9,670  in CF INDS INC on September 2, 2024 and sell it today you would lose (1,129) from holding CF INDS INC or give up 11.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.19%
Values	Daily Returns

Senmiao Technology  vs.  CF INDS INC

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 fragile 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.

CF INDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CF INDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CF INDS INC investors.

Pair Trading with Senmiao Technology and 12527GAE3

The main advantage of trading using opposite Senmiao Technology and 12527GAE3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, 12527GAE3 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 12527GAE3 will offset losses from the drop in 12527GAE3's long position.

The idea behind Senmiao Technology and CF INDS INC 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.