Correlation Between ATS and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both ATS and Sensient 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 ATS and Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATS Corporation and Sensient Technologies, you can compare the effects of market volatilities on ATS and Sensient 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 ATS with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS and Sensient Technologies.
Diversification Opportunities for ATS and Sensient Technologies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATS and Sensient is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ATS Corp. and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and ATS 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 ATS Corporation are associated (or correlated) with Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of ATS i.e., ATS and Sensient Technologies go up and down completely randomly.
Pair Corralation between ATS and Sensient Technologies
Considering the 90-day investment horizon ATS is expected to generate 1.35 times less return on investment than Sensient Technologies. In addition to that, ATS is 1.29 times more volatile than Sensient Technologies. It trades about 0.01 of its total potential returns per unit of risk. Sensient Technologies is currently generating about 0.02 per unit of volatility. If you would invest 7,130 in Sensient Technologies on September 3, 2024 and sell it today you would earn a total of 634.00 from holding Sensient Technologies or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATS Corp. vs. Sensient Technologies
Performance |
| Timeline |
| ATS Corporation |
| Sensient Technologies |
ATS and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATS and Sensient Technologies
The main advantage of trading using opposite ATS and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS position performs unexpectedly, Sensient 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.| ATS vs. Sensient Technologies | ATS vs. CF Industries Holdings | ATS vs. Chemours Co | ATS vs. Asure Software |
| Sensient Technologies vs. SPACE | Sensient Technologies vs. Bayview Acquisition Corp | Sensient Technologies vs. T Rowe Price | Sensient Technologies vs. Ampleforth |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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