Correlation Between Affiliated Managers and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers 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 Affiliated Managers and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and Senmiao Technology, you can compare the effects of market volatilities on Affiliated Managers 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 Affiliated Managers with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Senmiao Technology.
Diversification Opportunities for Affiliated Managers and Senmiao Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affiliated and Senmiao is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Affiliated Managers 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 Affiliated Managers 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 Affiliated Managers i.e., Affiliated Managers and Senmiao Technology go up and down completely randomly.
Pair Corralation between Affiliated Managers and Senmiao Technology
Considering the 90-day investment horizon Affiliated Managers is expected to generate 2.37 times less return on investment than Senmiao Technology. But when comparing it to its historical volatility, Affiliated Managers Group is 3.46 times less risky than Senmiao Technology. It trades about 0.03 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Senmiao Technology on January 26, 2024 and sell it today you would lose (27.00) from holding Senmiao Technology or give up 24.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Affiliated Managers Group vs. Senmiao Technology
Performance |
Timeline |
Affiliated Managers |
Senmiao Technology |
Affiliated Managers and Senmiao Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affiliated Managers and Senmiao Technology
The main advantage of trading using opposite Affiliated Managers and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers 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.Affiliated Managers vs. Federated Premier Municipal | Affiliated Managers vs. Blackrock Muniyield | Affiliated Managers vs. NXG NextGen Infrastructure | Affiliated Managers vs. Brightsphere Investment Group |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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