Correlation Between FLIR Systems and Electro Sensors
Can any of the company-specific risk be diversified away by investing in both FLIR Systems and Electro Sensors 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 FLIR Systems and Electro Sensors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLIR Systems and Electro Sensors, you can compare the effects of market volatilities on FLIR Systems and Electro Sensors 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 FLIR Systems with a short position of Electro Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLIR Systems and Electro Sensors.
Diversification Opportunities for FLIR Systems and Electro Sensors
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FLIR and Electro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FLIR Systems and Electro Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Sensors and FLIR Systems 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 FLIR Systems are associated (or correlated) with Electro Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Sensors has no effect on the direction of FLIR Systems i.e., FLIR Systems and Electro Sensors go up and down completely randomly.
Pair Corralation between FLIR Systems and Electro Sensors
If you would invest (100.00) in FLIR Systems on January 25, 2024 and sell it today you would earn a total of 100.00 from holding FLIR Systems or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
FLIR Systems vs. Electro Sensors
Performance |
Timeline |
FLIR Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Electro Sensors |
FLIR Systems and Electro Sensors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FLIR Systems and Electro Sensors
The main advantage of trading using opposite FLIR Systems and Electro Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLIR Systems position performs unexpectedly, Electro Sensors 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 Electro Sensors will offset losses from the drop in Electro Sensors' long position.FLIR Systems vs. Mannatech Incorporated | FLIR Systems vs. Ecolab Inc | FLIR Systems vs. Dow Inc | FLIR Systems vs. Avient Corp |
Electro Sensors vs. ESCO Technologies | Electro Sensors vs. Mesa Laboratories | Electro Sensors vs. Vishay Precision Group | Electro Sensors vs. Sensata Technologies Holding |
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 the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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