Correlation Between HUTCHMED DRC and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both HUTCHMED DRC 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 HUTCHMED DRC and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHMED DRC and Senmiao Technology, you can compare the effects of market volatilities on HUTCHMED DRC 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 HUTCHMED DRC with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and Senmiao Technology.
Diversification Opportunities for HUTCHMED DRC and Senmiao Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUTCHMED and Senmiao is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and HUTCHMED DRC 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 HUTCHMED DRC 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 HUTCHMED DRC i.e., HUTCHMED DRC and Senmiao Technology go up and down completely randomly.
Pair Corralation between HUTCHMED DRC and Senmiao Technology
Considering the 90-day investment horizon HUTCHMED DRC is expected to generate 2.06 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, HUTCHMED DRC is 1.43 times less risky than Senmiao Technology. It trades about 0.02 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Senmiao Technology on December 4, 2024 and sell it today you would lose (7.00) from holding Senmiao Technology or give up 7.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HUTCHMED DRC vs. Senmiao Technology
Performance |
Timeline |
HUTCHMED DRC |
Senmiao Technology |
HUTCHMED DRC and Senmiao Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HUTCHMED DRC and Senmiao Technology
The main advantage of trading using opposite HUTCHMED DRC and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHMED DRC 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.HUTCHMED DRC vs. ANI Pharmaceuticals | HUTCHMED DRC vs. Phibro Animal Health | HUTCHMED DRC vs. Prestige Brand Holdings | HUTCHMED DRC vs. Pacira BioSciences, |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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