Correlation Between Bridger Aerospace and Senstar Technologies
Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Senstar 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 Bridger Aerospace and Senstar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridger Aerospace Group and Senstar Technologies, you can compare the effects of market volatilities on Bridger Aerospace and Senstar 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 Bridger Aerospace with a short position of Senstar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Senstar Technologies.
Diversification Opportunities for Bridger Aerospace and Senstar Technologies
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bridger and Senstar is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Senstar Technologies go up and down completely randomly.
Pair Corralation between Bridger Aerospace and Senstar Technologies
Given the investment horizon of 90 days Bridger Aerospace Group is expected to under-perform the Senstar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Bridger Aerospace Group is 1.84 times less risky than Senstar Technologies. The stock trades about -0.22 of its potential returns per unit of risk. The Senstar Technologies is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Senstar Technologies on September 1, 2024 and sell it today you would earn a total of 167.00 from holding Senstar Technologies or generate 112.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridger Aerospace Group vs. Senstar Technologies
Performance |
| Timeline |
| Bridger Aerospace |
| Senstar Technologies |
Bridger Aerospace and Senstar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridger Aerospace and Senstar Technologies
The main advantage of trading using opposite Bridger Aerospace and Senstar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridger Aerospace position performs unexpectedly, Senstar 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 Senstar Technologies will offset losses from the drop in Senstar Technologies' long position.| Bridger Aerospace vs. Desktop Metal | Bridger Aerospace vs. Fabrinet | Bridger Aerospace vs. Knowles Cor | Bridger Aerospace vs. Ubiquiti Networks |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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