Correlation Between IEI Integration and Sensortek Technology
Can any of the company-specific risk be diversified away by investing in both IEI Integration and Sensortek Technology 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 IEI Integration and Sensortek Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and Sensortek Technology Corp, you can compare the effects of market volatilities on IEI Integration and Sensortek Technology 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 IEI Integration with a short position of Sensortek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and Sensortek Technology.
Diversification Opportunities for IEI Integration and Sensortek Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IEI and Sensortek is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Sensortek Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensortek Technology Corp and IEI Integration 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 IEI Integration Corp are associated (or correlated) with Sensortek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensortek Technology Corp has no effect on the direction of IEI Integration i.e., IEI Integration and Sensortek Technology go up and down completely randomly.
Pair Corralation between IEI Integration and Sensortek Technology
Assuming the 90 days trading horizon IEI Integration is expected to generate 3.02 times less return on investment than Sensortek Technology. But when comparing it to its historical volatility, IEI Integration Corp is 1.31 times less risky than Sensortek Technology. It trades about 0.01 of its potential returns per unit of risk. Sensortek Technology Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 22,503 in Sensortek Technology Corp on August 30, 2024 and sell it today you would earn a total of 4,697 from holding Sensortek Technology Corp or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IEI Integration Corp vs. Sensortek Technology Corp
Performance |
| Timeline |
| IEI Integration Corp |
| Sensortek Technology Corp |
IEI Integration and Sensortek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IEI Integration and Sensortek Technology
The main advantage of trading using opposite IEI Integration and Sensortek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration position performs unexpectedly, Sensortek Technology 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 Sensortek Technology will offset losses from the drop in Sensortek Technology's long position.| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK Technology |
| Sensortek Technology vs. Hon Hai Precision | Sensortek Technology vs. Delta Electronics | Sensortek Technology vs. LARGAN Precision Co | Sensortek Technology vs. E Ink Holdings |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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