Correlation Between Zapp Electric and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Zapp Electric 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 Zapp Electric and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zapp Electric Vehicles and Senmiao Technology, you can compare the effects of market volatilities on Zapp Electric 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 Zapp Electric with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zapp Electric and Senmiao Technology.
Diversification Opportunities for Zapp Electric and Senmiao Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zapp and Senmiao is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zapp Electric Vehicles and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Zapp Electric 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 Zapp Electric Vehicles 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 Zapp Electric i.e., Zapp Electric and Senmiao Technology go up and down completely randomly.
Pair Corralation between Zapp Electric and Senmiao Technology
Given the investment horizon of 90 days Zapp Electric Vehicles is expected to under-perform the Senmiao Technology. In addition to that, Zapp Electric is 1.87 times more volatile than Senmiao Technology. It trades about -0.13 of its total potential returns per unit of risk. Senmiao Technology is currently generating about 0.01 per unit of volatility. If you would invest 90.00 in Senmiao Technology on December 4, 2024 and sell it today you would lose (2.00) from holding Senmiao Technology or give up 2.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Zapp Electric Vehicles vs. Senmiao Technology
Performance |
Timeline |
Zapp Electric Vehicles |
Senmiao Technology |
Zapp Electric and Senmiao Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zapp Electric and Senmiao Technology
The main advantage of trading using opposite Zapp Electric and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zapp Electric 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.Zapp Electric vs. Southern Home Medicl | Zapp Electric vs. Gildan Activewear | Zapp Electric vs. Zoom Video Communications | Zapp Electric vs. Videolocity International |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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