Correlation Between Senmiao Technology and Aegean Airlines

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

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

Diversification Opportunities for Senmiao Technology and Aegean Airlines

0.47

Correlation Coefficient

Senmiao Technology  Aegean Airlines

Very weak diversification

The 3 months correlation between Senmiao and Aegean is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Senmiao Technology 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 Senmiao Technology are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Aegean Airlines go up and down completely randomly.

Pair Corralation between Senmiao Technology and Aegean Airlines

Given the investment horizon of 90 days Senmiao Technology is expected to generate 1.06 times less return on investment than Aegean Airlines. In addition to that, Senmiao Technology is 2.5 times more volatile than Aegean Airlines SA. It trades about 0.03 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.07 per unit of volatility. If you would invest  532.00  in Aegean Airlines SA on September 2, 2024 and sell it today you would earn a total of  553.00  from holding Aegean Airlines SA or generate 103.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Senmiao Technology  vs.  Aegean Airlines SA

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 fragile 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.

Aegean Airlines SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Senmiao Technology and Aegean Airlines

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

The idea behind Senmiao Technology and Aegean Airlines SA 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 Stocks Directory module to find actively traded stocks across global markets.