Correlation Between Universal Security and Senstar Technologies

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

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

Diversification Opportunities for Universal Security and Senstar Technologies

0.12

Correlation Coefficient

Universal Security  Senstar Technologies

Average diversification

The 3 months correlation between Universal and Senstar is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Universal Security Instruments and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies and Universal Security 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 Universal Security Instruments are associated (or correlated) with Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Universal Security i.e., Universal Security and Senstar Technologies go up and down completely randomly.

Pair Corralation between Universal Security and Senstar Technologies

Considering the 90-day investment horizon Universal Security Instruments is expected to under-perform the Senstar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Universal Security Instruments is 1.39 times less risky than Senstar Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Senstar Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  343.00  in Senstar Technologies on December 22, 2024 and sell it today you would earn a total of  2.00  from holding Senstar Technologies or generate 0.58% return on investment over 90 days.

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

Universal Security Instruments  vs.  Senstar Technologies

Universal Security

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Security Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Senstar Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senstar Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Senstar Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Universal Security and Senstar Technologies

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

The idea behind Universal Security Instruments and Senstar 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 Directory module to find actively traded commodities issued by global exchanges.