Correlation Between Carlton Investments and Sensen Networks

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

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

Diversification Opportunities for Carlton Investments and Sensen Networks

-0.46

Correlation Coefficient

Carlton Investments  Sensen Networks

Very good diversification

The 3 months correlation between Carlton and Sensen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and Sensen Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensen Networks and Carlton Investments 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 Carlton Investments are associated (or correlated) with Sensen Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensen Networks has no effect on the direction of Carlton Investments i.e., Carlton Investments and Sensen Networks go up and down completely randomly.

Pair Corralation between Carlton Investments and Sensen Networks

Assuming the 90 days trading horizon Carlton Investments is expected to generate 26.75 times less return on investment than Sensen Networks. But when comparing it to its historical volatility, Carlton Investments is 9.92 times less risky than Sensen Networks. It trades about 0.02 of its potential returns per unit of risk. Sensen Networks is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2.90  in Sensen Networks on October 5, 2024 and sell it today you would earn a total of  1.00  from holding Sensen Networks or generate 34.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Carlton Investments  vs.  Sensen Networks

Carlton Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carlton Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carlton Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sensen Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensen Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Carlton Investments and Sensen Networks

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

The idea behind Carlton Investments and Sensen Networks 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.