Correlation Between Senmiao Technology and Nelnet

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

By analyzing existing cross correlation between Senmiao Technology and Nelnet Inc, you can compare the effects of market volatilities on Senmiao Technology and Nelnet 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 Nelnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and Nelnet.

Diversification Opportunities for Senmiao Technology and Nelnet

0.08

Correlation Coefficient

Senmiao Technology  Nelnet

Significant diversification

The 3 months correlation between Senmiao and Nelnet is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc 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 Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Nelnet go up and down completely randomly.

Pair Corralation between Senmiao Technology and Nelnet

Given the investment horizon of 90 days Senmiao Technology is expected to generate 2.37 times more return on investment than Nelnet. However, Senmiao Technology is 2.37 times more volatile than Nelnet Inc. It trades about 0.21 of its potential returns per unit of risk. Nelnet Inc is currently generating about -0.16 per unit of risk. If you would invest  89.00  in Senmiao Technology on October 1, 2024 and sell it today you would earn a total of  9.00  from holding Senmiao Technology or generate 10.11% return on investment over 90 days.

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

Senmiao Technology  vs.  Nelnet Inc

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.

Nelnet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nelnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nelnet is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Senmiao Technology and Nelnet

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

The idea behind Senmiao Technology and Nelnet Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.