Correlation Between Sensient Technologies and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Sligro Food 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 Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Sligro Food Group, you can compare the effects of market volatilities on Sensient Technologies and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Sligro Food.
Diversification Opportunities for Sensient Technologies and Sligro Food
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sensient and Sligro is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Sligro Food go up and down completely randomly.
Pair Corralation between Sensient Technologies and Sligro Food
If you would invest 1,200 in Sligro Food Group on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Sligro Food Group or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sensient Technologies vs. Sligro Food Group
Performance |
Timeline |
Sensient Technologies |
Sligro Food Group |
Sensient Technologies and Sligro Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sensient Technologies and Sligro Food
The main advantage of trading using opposite Sensient Technologies and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.The idea behind Sensient Technologies and Sligro Food Group 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.Sligro Food vs. Chewy Inc | Sligro Food vs. RadNet Inc | Sligro Food vs. Fast Retailing Co | Sligro Food vs. BioNTech SE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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