Correlation Between CLPS and Senmiao Technology

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

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

Diversification Opportunities for CLPS and Senmiao Technology

0.15

Correlation Coefficient

CLPS  Senmiao Technology

Average diversification

The 3 months correlation between CLPS and Senmiao is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and CLPS 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 CLPS Inc are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of CLPS i.e., CLPS and Senmiao Technology go up and down completely randomly.

Pair Corralation between CLPS and Senmiao Technology

Given the investment horizon of 90 days CLPS Inc is expected to under-perform the Senmiao Technology. But the stock apears to be less risky and, when comparing its historical volatility, CLPS Inc is 41.65 times less risky than Senmiao Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Senmiao Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  905.00  in Senmiao Technology on May 1, 2025 and sell it today you would lose (631.00) from holding Senmiao Technology or give up 69.72% of portfolio value over 90 days.

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

CLPS Inc  vs.  Senmiao Technology

CLPS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CLPS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Senmiao Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Senmiao Technology are ranked lower than 8 (%) 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.

Pair Trading with CLPS and Senmiao Technology

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

The idea behind CLPS Inc and Senmiao Technology 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.