Correlation Between Sensortek Technology and CKM Building
Can any of the company-specific risk be diversified away by investing in both Sensortek Technology and CKM Building 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 Sensortek Technology and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensortek Technology Corp and CKM Building Material, you can compare the effects of market volatilities on Sensortek Technology and CKM Building 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 Sensortek Technology with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensortek Technology and CKM Building.
Diversification Opportunities for Sensortek Technology and CKM Building
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensortek and CKM is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sensortek Technology Corp and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material and Sensortek Technology 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 Sensortek Technology Corp are associated (or correlated) with CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Sensortek Technology i.e., Sensortek Technology and CKM Building go up and down completely randomly.
Pair Corralation between Sensortek Technology and CKM Building
Assuming the 90 days trading horizon Sensortek Technology Corp is expected to under-perform the CKM Building. In addition to that, Sensortek Technology is 1.3 times more volatile than CKM Building Material. It trades about -0.17 of its total potential returns per unit of risk. CKM Building Material is currently generating about 0.12 per unit of volatility. If you would invest 3,475 in CKM Building Material on October 24, 2024 and sell it today you would earn a total of 115.00 from holding CKM Building Material or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensortek Technology Corp vs. CKM Building Material
Performance |
| Timeline |
| Sensortek Technology Corp |
| CKM Building Material |
Sensortek Technology and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensortek Technology and CKM Building
The main advantage of trading using opposite Sensortek Technology and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensortek Technology position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building's long position.| Sensortek Technology vs. Hon Hai Precision | Sensortek Technology vs. Delta Electronics | Sensortek Technology vs. LARGAN Precision Co | Sensortek Technology vs. E Ink Holdings |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Buima Group | CKM Building vs. Champion Building Materials | CKM Building vs. MJ International Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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