Correlation Between Sensata Technologies and Dynasil Of

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

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

Diversification Opportunities for Sensata Technologies and Dynasil Of

0.18

Correlation Coefficient

Sensata Technologies  Dynasil Of

Average diversification

The 3 months correlation between Sensata and Dynasil is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Dynasil of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasil Of and Sensata 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 Sensata Technologies Holding are associated (or correlated) with Dynasil Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasil Of has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Dynasil Of go up and down completely randomly.

Pair Corralation between Sensata Technologies and Dynasil Of

If you would invest  3,357  in Sensata Technologies Holding on February 19, 2024 and sell it today you would earn a total of  920.00  from holding Sensata Technologies Holding or generate 27.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Sensata Technologies Holding  vs.  Dynasil of

Sensata Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sensata Technologies Holding are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sensata Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dynasil Of

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynasil of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Dynasil Of is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sensata Technologies and Dynasil Of

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

The idea behind Sensata Technologies Holding and Dynasil of 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.