Correlation Between Amprius Technologies and Sensata Technologies

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

Diversification Opportunities for Amprius Technologies and Sensata Technologies

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amprius and Sensata is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amprius Technologies and Sensata Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensata Technologies and Amprius 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 Amprius Technologies are associated (or correlated) with Sensata Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensata Technologies has no effect on the direction of Amprius Technologies i.e., Amprius Technologies and Sensata Technologies go up and down completely randomly.

Pair Corralation between Amprius Technologies and Sensata Technologies

Given the investment horizon of 90 days Amprius Technologies is expected to generate 5.17 times more return on investment than Sensata Technologies. However, Amprius Technologies is 5.17 times more volatile than Sensata Technologies Holding. It trades about 0.12 of its potential returns per unit of risk. Sensata Technologies Holding is currently generating about -0.15 per unit of risk. If you would invest  633.00  in Amprius Technologies on December 26, 2022 and sell it today you would earn a total of  117.00  from holding Amprius Technologies or generate 18.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Amprius Technologies  vs.  Sensata Technologies Holding

 Performance (%) 
       Timeline  
Amprius Technologies 

Amprius Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.
Sensata Technologies 

Sensata Performance

10 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Sensata Technologies Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Sensata Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amprius Technologies and Sensata Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amprius Technologies and Sensata Technologies

The main advantage of trading using opposite Amprius Technologies and Sensata Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amprius Technologies position performs unexpectedly, Sensata 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 Sensata Technologies will offset losses from the drop in Sensata Technologies' long position.
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The idea behind Amprius Technologies and Sensata Technologies Holding 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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Check out your portfolio center. 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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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