Correlation Between Sensata Technologies and ERecord Management

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

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

Diversification Opportunities for Sensata Technologies and ERecord Management

0.0

Correlation Coefficient

Sensata Technologies  ERecord Management

Pay attention - limited upside

The 3 months correlation between Sensata and ERecord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and ERecord Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERecord Management and Sensata Technologies 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 Sensata Technologies Holding are associated (or correlated) with ERecord Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERecord Management has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and ERecord Management go up and down completely randomly.

Pair Corralation between Sensata Technologies and ERecord Management

If you would invest  2,740  in Sensata Technologies Holding on October 25, 2024 and sell it today you would earn a total of  137.00  from holding Sensata Technologies Holding or generate 5.0% return on investment over 90 days.

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

Sensata Technologies Holding  vs.  ERecord Management

Sensata Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensata Technologies Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

ERecord Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ERecord Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ERecord Management is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sensata Technologies and ERecord Management

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

The idea behind Sensata Technologies Holding and ERecord Management 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.