Correlation Between Ramaco Resources and Senmiao Technology

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

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

Diversification Opportunities for Ramaco Resources and Senmiao Technology

-0.19

Correlation Coefficient

Ramaco Resources  Senmiao Technology

Good diversification

The 3 months correlation between Ramaco and Senmiao is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ramaco Resources and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Ramaco Resources 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 Ramaco Resources 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 Ramaco Resources i.e., Ramaco Resources and Senmiao Technology go up and down completely randomly.

Pair Corralation between Ramaco Resources and Senmiao Technology

Assuming the 90 days horizon Ramaco Resources is expected to generate 0.77 times more return on investment than Senmiao Technology. However, Ramaco Resources is 1.3 times less risky 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  963.00  in Ramaco Resources on September 17, 2024 and sell it today you would earn a total of  87.00  from holding Ramaco Resources or generate 9.03% return on investment over 90 days.

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

Ramaco Resources  vs.  Senmiao Technology

Ramaco Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ramaco Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Ramaco Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Senmiao Technology

Risk-Adjusted Performance

0 of 100

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 abnormal performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ramaco Resources and Senmiao Technology

The main advantage of trading using opposite Ramaco Resources and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramaco Resources 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 Ramaco Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.