Correlation Between Sensata Technologies and Garmin
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Garmin 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 Garmin 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 Garmin, you can compare the effects of market volatilities on Sensata Technologies and Garmin 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 Garmin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Garmin.
Diversification Opportunities for Sensata Technologies and Garmin
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sensata and Garmin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Garmin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garmin 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 Garmin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garmin has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Garmin go up and down completely randomly.
Pair Corralation between Sensata Technologies and Garmin
Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to generate 0.81 times more return on investment than Garmin. However, Sensata Technologies Holding is 1.24 times less risky than Garmin. It trades about 0.08 of its potential returns per unit of risk. Garmin is currently generating about 0.05 per unit of risk. If you would invest 2,550 in Sensata Technologies Holding on December 5, 2024 and sell it today you would earn a total of 103.00 from holding Sensata Technologies Holding or generate 4.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sensata Technologies Holding vs. Garmin
Performance |
Timeline |
Sensata Technologies |
Garmin |
Sensata Technologies and Garmin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sensata Technologies and Garmin
The main advantage of trading using opposite Sensata Technologies and Garmin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Garmin 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 Garmin will offset losses from the drop in Garmin's long position.Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
Garmin vs. Vontier Corp | Garmin vs. Teledyne Technologies Incorporated | Garmin vs. ESCO Technologies | Garmin vs. MKS Instruments |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |