Correlation Between Senseonics Holdings and PFA Invest

Can any of the company-specific risk be diversified away by investing in both Senseonics Holdings and PFA Invest 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 Senseonics Holdings and PFA Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Senseonics Holdings and PFA Invest Balance, you can compare the effects of market volatilities on Senseonics Holdings and PFA Invest 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 Senseonics Holdings with a short position of PFA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senseonics Holdings and PFA Invest.

Diversification Opportunities for Senseonics Holdings and PFA Invest

-0.16

Correlation Coefficient

Senseonics Holdings  PFA Invest

Good diversification

The 3 months correlation between Senseonics and PFA is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Senseonics Holdings and PFA Invest Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFA Invest Balance and Senseonics Holdings 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 Senseonics Holdings are associated (or correlated) with PFA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFA Invest Balance has no effect on the direction of Senseonics Holdings i.e., Senseonics Holdings and PFA Invest go up and down completely randomly.

Pair Corralation between Senseonics Holdings and PFA Invest

Given the investment horizon of 90 days Senseonics Holdings is expected to under-perform the PFA Invest. In addition to that, Senseonics Holdings is 9.98 times more volatile than PFA Invest Balance. It trades about -0.27 of its total potential returns per unit of risk. PFA Invest Balance is currently generating about -0.15 per unit of volatility. If you would invest  14,099  in PFA Invest Balance on January 26, 2024 and sell it today you would lose (154.00) from holding PFA Invest Balance or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Senseonics Holdings  vs.  PFA Invest Balance

Senseonics Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senseonics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PFA Invest Balance

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PFA Invest Balance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PFA Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Senseonics Holdings and PFA Invest

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

The idea behind Senseonics Holdings and PFA Invest Balance 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.