Correlation Between Bayview Acquisition and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition 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 Bayview Acquisition and Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayview Acquisition Corp and Sensient Technologies, you can compare the effects of market volatilities on Bayview Acquisition 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 Bayview Acquisition with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Sensient Technologies.
Diversification Opportunities for Bayview Acquisition and Sensient Technologies
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bayview and Sensient is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and Bayview Acquisition 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 Bayview Acquisition Corp 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 Bayview Acquisition i.e., Bayview Acquisition and Sensient Technologies go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Sensient Technologies
Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 0.62 times more return on investment than Sensient Technologies. However, Bayview Acquisition Corp is 1.61 times less risky than Sensient Technologies. It trades about 0.04 of its potential returns per unit of risk. Sensient Technologies is currently generating about 0.02 per unit of risk. If you would invest 1,000.00 in Bayview Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Bayview Acquisition Corp or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 49.09% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Sensient Technologies
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Sensient Technologies |
Bayview Acquisition and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Sensient Technologies
The main advantage of trading using opposite Bayview Acquisition and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition 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.| Bayview Acquisition vs. Nasdaq Inc | Bayview Acquisition vs. Broadstone Net Lease | Bayview Acquisition vs. Kite Realty Group | Bayview Acquisition vs. Playtika Holding Corp |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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