Correlation Between Senmiao Technology and ReTo Eco
Can any of the company-specific risk be diversified away by investing in both Senmiao Technology and ReTo Eco 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 ReTo Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senmiao Technology and ReTo Eco Solutions, you can compare the effects of market volatilities on Senmiao Technology and ReTo Eco 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 ReTo Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senmiao Technology and ReTo Eco.
Diversification Opportunities for Senmiao Technology and ReTo Eco
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senmiao and ReTo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and ReTo Eco Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReTo Eco Solutions 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 ReTo Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReTo Eco Solutions has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and ReTo Eco go up and down completely randomly.
Pair Corralation between Senmiao Technology and ReTo Eco
Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the ReTo Eco. In addition to that, Senmiao Technology is 2.26 times more volatile than ReTo Eco Solutions. It trades about -0.1 of its total potential returns per unit of risk. ReTo Eco Solutions is currently generating about -0.13 per unit of volatility. If you would invest 333.00 in ReTo Eco Solutions on June 9, 2025 and sell it today you would lose (149.00) from holding ReTo Eco Solutions or give up 44.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senmiao Technology vs. ReTo Eco Solutions
Performance |
| Timeline |
| Senmiao Technology |
| ReTo Eco Solutions |
Senmiao Technology and ReTo Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senmiao Technology and ReTo Eco
The main advantage of trading using opposite Senmiao Technology and ReTo Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senmiao Technology position performs unexpectedly, ReTo Eco 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 ReTo Eco will offset losses from the drop in ReTo Eco's long position.| Senmiao Technology vs. Federal Agricultural Mortgage | Senmiao Technology vs. GreenPro Capital Corp | Senmiao Technology vs. Kaixin Auto Holdings | Senmiao Technology vs. ReTo Eco Solutions |
| ReTo Eco vs. Eagle Materials | ReTo Eco vs. Martin Marietta Materials | ReTo Eco vs. Cemex SAB de | ReTo Eco vs. TDH Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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