Correlation Between Senmiao Technology and WisdomTree

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

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

Diversification Opportunities for Senmiao Technology and WisdomTree

-0.76

Correlation Coefficient

Senmiao Technology  WisdomTree

Pay attention - limited upside

The 3 months correlation between Senmiao and WisdomTree is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Senmiao Technology and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Senmiao Technology i.e., Senmiao Technology and WisdomTree go up and down completely randomly.

Pair Corralation between Senmiao Technology and WisdomTree

Given the investment horizon of 90 days Senmiao Technology is expected to generate 62.3 times more return on investment than WisdomTree. However, Senmiao Technology is 62.3 times more volatile than WisdomTree. It trades about 0.1 of its potential returns per unit of risk. WisdomTree is currently generating about 0.27 per unit of risk. If you would invest  910.00  in Senmiao Technology on May 18, 2025 and sell it today you would lose (695.00) from holding Senmiao Technology or give up 76.37% of portfolio value over 90 days.

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

Senmiao Technology  vs.  WisdomTree

Senmiao Technology

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Senmiao Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, WisdomTree unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Senmiao Technology and WisdomTree

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

The idea behind Senmiao Technology and WisdomTree 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.