Correlation Between Greentown Management and Senmiao Technology

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

By analyzing existing cross correlation between Greentown Management Holdings and Senmiao Technology, you can compare the effects of market volatilities on Greentown Management 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 Greentown Management with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentown Management and Senmiao Technology.

Diversification Opportunities for Greentown Management and Senmiao Technology

0.0

Correlation Coefficient

Greentown Management  Senmiao Technology

Pay attention - limited upside

The 3 months correlation between Greentown and Senmiao is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Greentown Management Holdings and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Greentown Management 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 Greentown Management Holdings 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 Greentown Management i.e., Greentown Management and Senmiao Technology go up and down completely randomly.

Pair Corralation between Greentown Management and Senmiao Technology

If you would invest  50.00  in Greentown Management Holdings on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Greentown Management Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Greentown Management Holdings  vs.  Senmiao Technology

Greentown Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greentown Management Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Greentown Management is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Senmiao Technology

Risk-Adjusted Performance

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 comparatively stable technical indicators, Senmiao Technology is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Greentown Management and Senmiao Technology

The main advantage of trading using opposite Greentown Management and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentown Management 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.

The idea behind Greentown Management Holdings and Senmiao Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.