Correlation Between Sentage Holdings and Nisun International

Can any of the company-specific risk be diversified away by investing in both Sentage Holdings and Nisun International 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 Sentage Holdings and Nisun International into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sentage Holdings and Nisun International

0.56

Correlation Coefficient

Sentage Holdings  Nisun International

Very weak diversification

The 3 months correlation between Sentage and Nisun is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sentage Holdings and Nisun International Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisun International and Sentage Holdings 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 Sentage Holdings are associated (or correlated) with Nisun International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisun International has no effect on the direction of Sentage Holdings i.e., Sentage Holdings and Nisun International go up and down completely randomly.

Pair Corralation between Sentage Holdings and Nisun International

Given the investment horizon of 90 days Sentage Holdings is expected to under-perform the Nisun International. But the stock apears to be less risky and, when comparing its historical volatility, Sentage Holdings is 2.41 times less risky than Nisun International. The stock trades about 0.0 of its potential returns per unit of risk. The Nisun International Enterprise is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  947.00  in Nisun International Enterprise on August 30, 2024 and sell it today you would lose (90.00) from holding Nisun International Enterprise or give up 9.5% of portfolio value over 90 days.

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

Sentage Holdings  vs.  Nisun International Enterprise

Sentage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nisun International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nisun International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Sentage Holdings and Nisun International

The main advantage of trading using opposite Sentage Holdings and Nisun International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentage Holdings position performs unexpectedly, Nisun International 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 Nisun International will offset losses from the drop in Nisun International's long position.

The idea behind Sentage Holdings and Nisun International Enterprise 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.