Correlation Between Senao Networks and Radiation Technology

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

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

Diversification Opportunities for Senao Networks and Radiation Technology

-0.55

Correlation Coefficient

Senao Networks  Radiation Technology

Excellent diversification

The 3 months correlation between Senao and Radiation is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Senao Networks and Radiation Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiation Technology and Senao Networks 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 Senao Networks are associated (or correlated) with Radiation Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiation Technology has no effect on the direction of Senao Networks i.e., Senao Networks and Radiation Technology go up and down completely randomly.

Pair Corralation between Senao Networks and Radiation Technology

Assuming the 90 days trading horizon Senao Networks is expected to under-perform the Radiation Technology. In addition to that, Senao Networks is 1.82 times more volatile than Radiation Technology. It trades about -0.12 of its total potential returns per unit of risk. Radiation Technology is currently generating about 0.05 per unit of volatility. If you would invest  5,020  in Radiation Technology on January 30, 2024 and sell it today you would earn a total of  250.00  from holding Radiation Technology or generate 4.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.15%
Values	Daily Returns

Senao Networks  vs.  Radiation Technology

Senao Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senao Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Radiation Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Radiation Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Radiation Technology may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Senao Networks and Radiation Technology

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

The idea behind Senao Networks and Radiation 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.