Correlation Between Dolphin Entertainment and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Dolphin Entertainment and Senmiao Technology 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 Dolphin Entertainment and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolphin Entertainment and Senmiao Technology, you can compare the effects of market volatilities on Dolphin Entertainment and Senmiao Technology 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 Dolphin Entertainment with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Entertainment and Senmiao Technology.
Diversification Opportunities for Dolphin Entertainment and Senmiao Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dolphin and Senmiao is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Dolphin Entertainment 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 Dolphin Entertainment are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Senmiao Technology go up and down completely randomly.
Pair Corralation between Dolphin Entertainment and Senmiao Technology
Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 1.23 times more return on investment than Senmiao Technology. However, Dolphin Entertainment is 1.23 times more volatile than Senmiao Technology. It trades about -0.06 of its potential returns per unit of risk. Senmiao Technology is currently generating about -0.12 per unit of risk. If you would invest 142.00 in Dolphin Entertainment on September 17, 2024 and sell it today you would lose (29.00) from holding Dolphin Entertainment or give up 20.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dolphin Entertainment vs. Senmiao Technology
Performance |
Timeline |
Dolphin Entertainment |
Senmiao Technology |
Dolphin Entertainment and Senmiao Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dolphin Entertainment and Senmiao Technology
The main advantage of trading using opposite Dolphin Entertainment and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.Dolphin Entertainment vs. Hall of Fame | Dolphin Entertainment vs. Wisekey International Holding | Dolphin Entertainment vs. Oriental Culture Holding |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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