Correlation Between Sensata Technologies and GreenPro Capital

Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and GreenPro Capital 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 GreenPro Capital 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 GreenPro Capital Corp, you can compare the effects of market volatilities on Sensata Technologies and GreenPro Capital 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 GreenPro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and GreenPro Capital.

Diversification Opportunities for Sensata Technologies and GreenPro Capital

-0.51

Correlation Coefficient

Sensata Technologies  GreenPro Capital

Excellent diversification

The 3 months correlation between Sensata and GreenPro is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and GreenPro Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPro Capital Corp 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 GreenPro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPro Capital Corp has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and GreenPro Capital go up and down completely randomly.

Pair Corralation between Sensata Technologies and GreenPro Capital

Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to generate 0.44 times more return on investment than GreenPro Capital. However, Sensata Technologies Holding is 2.29 times less risky than GreenPro Capital. It trades about -0.26 of its potential returns per unit of risk. GreenPro Capital Corp is currently generating about -0.18 per unit of risk. If you would invest  3,087  in Sensata Technologies Holding on September 22, 2024 and sell it today you would lose (363.00) from holding Sensata Technologies Holding or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sensata Technologies Holding  vs.  GreenPro Capital Corp

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GreenPro Capital Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPro Capital Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenPro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sensata Technologies and GreenPro Capital

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

The idea behind Sensata Technologies Holding and GreenPro Capital Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.