Correlation Between Sensient Technologies and HIMARK

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Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and HIMARK 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 HIMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and HIMARK 145 10 MAY 26, you can compare the effects of market volatilities on Sensient Technologies and HIMARK 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 HIMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and HIMARK.

Diversification Opportunities for Sensient Technologies and HIMARK

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Sensient and HIMARK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and HIMARK 145 10 MAY 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIMARK 145 10 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 HIMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIMARK 145 10 has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and HIMARK go up and down completely randomly.

Pair Corralation between Sensient Technologies and HIMARK

Considering the 90-day investment horizon Sensient Technologies is expected to generate 1.28 times less return on investment than HIMARK. In addition to that, Sensient Technologies is 2.57 times more volatile than HIMARK 145 10 MAY 26. It trades about 0.01 of its total potential returns per unit of risk. HIMARK 145 10 MAY 26 is currently generating about 0.04 per unit of volatility. If you would invest  8,919  in HIMARK 145 10 MAY 26 on October 27, 2024 and sell it today you would earn a total of  230.00  from holding HIMARK 145 10 MAY 26 or generate 2.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy24.9%
ValuesDaily Returns

Sensient Technologies  vs.  HIMARK 145 10 MAY 26

 Performance 
       Timeline  
Sensient Technologies 

Risk-Adjusted Performance

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Weak
 
Strong
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 comparatively stable basic indicators, Sensient Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
HIMARK 145 10 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HIMARK 145 10 MAY 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HIMARK 145 10 MAY 26 investors.

Sensient Technologies and HIMARK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sensient Technologies and HIMARK

The main advantage of trading using opposite Sensient Technologies and HIMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, HIMARK 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 HIMARK will offset losses from the drop in HIMARK's long position.
The idea behind Sensient Technologies and HIMARK 145 10 MAY 26 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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