Correlation Between Senmiao Technology and RENIASSANCERE

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

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

Diversification Opportunities for Senmiao Technology and RENIASSANCERE

-0.25

Correlation Coefficient

Senmiao Technology  RENIASSANCERE

Very good diversification

The 3 months correlation between Senmiao and RENIASSANCERE is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and RENIASSANCERE FIN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENIASSANCERE FIN 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 RENIASSANCERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENIASSANCERE FIN INC has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and RENIASSANCERE go up and down completely randomly.

Pair Corralation between Senmiao Technology and RENIASSANCERE

Given the investment horizon of 90 days Senmiao Technology is expected to generate 15.31 times more return on investment than RENIASSANCERE. However, Senmiao Technology is 15.31 times more volatile than RENIASSANCERE FIN INC. It trades about 0.03 of its potential returns per unit of risk. RENIASSANCERE FIN INC is currently generating about 0.0 per unit of risk. If you would invest  90.00  in Senmiao Technology on September 14, 2024 and sell it today you would lose (2.00) from holding Senmiao Technology or give up 2.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.22%
Values	Daily Returns

Senmiao Technology  vs.  RENIASSANCERE FIN 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 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.

RENIASSANCERE FIN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RENIASSANCERE FIN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RENIASSANCERE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Senmiao Technology and RENIASSANCERE

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

The idea behind Senmiao Technology and RENIASSANCERE FIN 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.