Correlation Between Sensient Technologies and Connexa Sports

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

By analyzing existing cross correlation between Sensient Technologies and Connexa Sports Technologies, you can compare the effects of market volatilities on Sensient Technologies and Connexa Sports 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 Connexa Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Connexa Sports.

Diversification Opportunities for Sensient Technologies and Connexa Sports

0.53

Correlation Coefficient

Sensient Technologies  Connexa Sports

Very weak diversification

The 3 months correlation between Sensient and Connexa is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Connexa Sports Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connexa Sports Techn 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 Connexa Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connexa Sports Techn has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Connexa Sports go up and down completely randomly.

Pair Corralation between Sensient Technologies and Connexa Sports

Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.18 times more return on investment than Connexa Sports. However, Sensient Technologies is 5.59 times less risky than Connexa Sports. It trades about 0.13 of its potential returns per unit of risk. Connexa Sports Technologies is currently generating about -0.43 per unit of risk. If you would invest  7,300  in Sensient Technologies on October 26, 2024 and sell it today you would earn a total of  296.00  from holding Sensient Technologies or generate 4.05% return on investment over 90 days.

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

Sensient Technologies  vs.  Connexa Sports Technologies

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 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.

Connexa Sports Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Connexa Sports Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Sensient Technologies and Connexa Sports

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

The idea behind Sensient Technologies and Connexa Sports Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.