Correlation Between Federal Agricultural and Senmiao Technology

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

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

Diversification Opportunities for Federal Agricultural and Senmiao Technology

0.0

Correlation Coefficient

Federal Agricultural  Senmiao Technology

Pay attention - limited upside

The 3 months correlation between Federal and Senmiao is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Federal Agricultural 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 Federal Agricultural Mortgage 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 Federal Agricultural i.e., Federal Agricultural and Senmiao Technology go up and down completely randomly.

Pair Corralation between Federal Agricultural and Senmiao Technology

If you would invest (100.00) in Federal Agricultural Mortgage on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Federal Agricultural Mortgage or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Federal Agricultural Mortgage  vs.  Senmiao Technology

Federal Agricultural

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Federal Agricultural Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Federal Agricultural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Federal Agricultural and Senmiao Technology

The main advantage of trading using opposite Federal Agricultural and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural 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 Federal Agricultural Mortgage 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.