Correlation Between Sensient Technologies and Fintech Ecosystem

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

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

Diversification Opportunities for Sensient Technologies and Fintech Ecosystem

0.14

Correlation Coefficient

Sensient Technologies  Fintech Ecosystem

Average diversification

The 3 months correlation between Sensient and Fintech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Fintech Ecosystem Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fintech Ecosystem and Sensient 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 Sensient Technologies are associated (or correlated) with Fintech Ecosystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fintech Ecosystem has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Fintech Ecosystem go up and down completely randomly.

Pair Corralation between Sensient Technologies and Fintech Ecosystem

Considering the 90-day investment horizon Sensient Technologies is expected to generate 6.28 times less return on investment than Fintech Ecosystem. In addition to that, Sensient Technologies is 1.57 times more volatile than Fintech Ecosystem Development. It trades about 0.0 of its total potential returns per unit of risk. Fintech Ecosystem Development is currently generating about 0.04 per unit of volatility. If you would invest  1,030  in Fintech Ecosystem Development on October 9, 2024 and sell it today you would earn a total of  135.00  from holding Fintech Ecosystem Development or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.05%
Values	Daily Returns

Sensient Technologies  vs.  Fintech Ecosystem Development

Sensient Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensient Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Fintech Ecosystem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fintech Ecosystem Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Fintech Ecosystem is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sensient Technologies and Fintech Ecosystem

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

The idea behind Sensient Technologies and Fintech Ecosystem Development 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.