Correlation Between Kite Realty and Senmiao Technology

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

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

Diversification Opportunities for Kite Realty and Senmiao Technology

-0.15

Correlation Coefficient

Kite Realty  Senmiao Technology

Good diversification

The 3 months correlation between Kite and Senmiao is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Kite Realty 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 Kite Realty Group 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 Kite Realty i.e., Kite Realty and Senmiao Technology go up and down completely randomly.

Pair Corralation between Kite Realty and Senmiao Technology

Considering the 90-day investment horizon Kite Realty Group is expected to generate 0.4 times more return on investment than Senmiao Technology. However, Kite Realty Group is 2.47 times less risky than Senmiao Technology. It trades about -0.12 of its potential returns per unit of risk. Senmiao Technology is currently generating about -0.1 per unit of risk. If you would invest  2,471  in Kite Realty Group on October 27, 2024 and sell it today you would lose (90.00) from holding Kite Realty Group or give up 3.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kite Realty Group  vs.  Senmiao Technology

Kite Realty Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kite Realty and Senmiao Technology

The main advantage of trading using opposite Kite Realty and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty 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 Kite Realty Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.