Correlation Between Senmiao Technology and Usio

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

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

Diversification Opportunities for Senmiao Technology and Usio

0.08

Correlation Coefficient

Senmiao Technology  Usio

Significant diversification

The 3 months correlation between Senmiao and Usio is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Usio go up and down completely randomly.

Pair Corralation between Senmiao Technology and Usio

Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the Usio. But the stock apears to be less risky and, when comparing its historical volatility, Senmiao Technology is 2.5 times less risky than Usio. The stock trades about -0.09 of its potential returns per unit of risk. The Usio Inc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Usio Inc on October 24, 2024 and sell it today you would earn a total of  106.50  from holding Usio Inc or generate 73.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Senmiao Technology  vs.  Usio Inc

Senmiao Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Senmiao Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Usio Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Usio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Senmiao Technology and Usio

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

The idea behind Senmiao Technology and Usio 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.