Correlation Between Coroware and SenesTech

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

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

Diversification Opportunities for Coroware and SenesTech

0.1

Correlation Coefficient

Coroware  SenesTech

Average diversification

The 3 months correlation between Coroware and SenesTech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Coroware and SenesTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenesTech and Coroware 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 Coroware are associated (or correlated) with SenesTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenesTech has no effect on the direction of Coroware i.e., Coroware and SenesTech go up and down completely randomly.

Pair Corralation between Coroware and SenesTech

Given the investment horizon of 90 days Coroware is expected to generate 22.63 times more return on investment than SenesTech. However, Coroware is 22.63 times more volatile than SenesTech. It trades about 0.2 of its potential returns per unit of risk. SenesTech is currently generating about 0.25 per unit of risk. If you would invest  0.01  in Coroware on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Coroware or generate 0.0% return on investment over 90 days.

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

Coroware  vs.  SenesTech

Coroware

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Coroware are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Coroware demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SenesTech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SenesTech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, SenesTech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coroware and SenesTech

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

The idea behind Coroware and SenesTech 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.