Correlation Between Sensient Technologies and 694308KH9

Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and 694308KH9 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 694308KH9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sensient Technologies and PCG 675 15 JAN 53, you can compare the effects of market volatilities on Sensient Technologies and 694308KH9 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 694308KH9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and 694308KH9.

Diversification Opportunities for Sensient Technologies and 694308KH9

-0.33

Correlation Coefficient

Sensient Technologies  694308KH9

Very good diversification

The 3 months correlation between Sensient and 694308KH9 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and PCG 675 15 JAN 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCG 675 15 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 694308KH9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCG 675 15 has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and 694308KH9 go up and down completely randomly.

Pair Corralation between Sensient Technologies and 694308KH9

Considering the 90-day investment horizon Sensient Technologies is expected to generate 1.34 times more return on investment than 694308KH9. However, Sensient Technologies is 1.34 times more volatile than PCG 675 15 JAN 53. It trades about 0.02 of its potential returns per unit of risk. PCG 675 15 JAN 53 is currently generating about -0.13 per unit of risk. If you would invest  7,260  in Sensient Technologies on December 25, 2024 and sell it today you would earn a total of  76.00  from holding Sensient Technologies or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Sensient Technologies  vs.  PCG 675 15 JAN 53

Sensient Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sensient Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

PCG 675 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 675 15 JAN 53 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish 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 PCG 675 15 JAN 53 investors.

Pair Trading with Sensient Technologies and 694308KH9

The main advantage of trading using opposite Sensient Technologies and 694308KH9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, 694308KH9 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 694308KH9 will offset losses from the drop in 694308KH9's long position.

The idea behind Sensient Technologies and PCG 675 15 JAN 53 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.