Correlation Between Senmiao Technology and Vacasa

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

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

Diversification Opportunities for Senmiao Technology and Vacasa

-0.09

Correlation Coefficient

Senmiao Technology  Vacasa

Good diversification

The 3 months correlation between Senmiao and Vacasa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and Vacasa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vacasa 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 Vacasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vacasa Inc has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and Vacasa go up and down completely randomly.

Pair Corralation between Senmiao Technology and Vacasa

Given the investment horizon of 90 days Senmiao Technology is expected to under-perform the Vacasa. In addition to that, Senmiao Technology is 3.89 times more volatile than Vacasa Inc. It trades about 0.0 of its total potential returns per unit of risk. Vacasa Inc is currently generating about -0.01 per unit of volatility. If you would invest  538.00  in Vacasa Inc on January 30, 2025 and sell it today you would lose (1.00) from holding Vacasa Inc or give up 0.19% of portfolio value over 90 days.

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

Senmiao Technology  vs.  Vacasa Inc

Senmiao Technology

Risk-Adjusted Performance

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 comparatively stable technical indicators, Senmiao Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Vacasa Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vacasa Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Vacasa may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Senmiao Technology and Vacasa

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

The idea behind Senmiao Technology and Vacasa 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.