Correlation Between China Clean and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both China Clean 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 China Clean and Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Clean Energy and Sensient Technologies, you can compare the effects of market volatilities on China Clean 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 China Clean with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Sensient Technologies.
Diversification Opportunities for China Clean and Sensient Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Sensient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and China Clean 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 China Clean Energy 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 China Clean i.e., China Clean and Sensient Technologies go up and down completely randomly.
Pair Corralation between China Clean and Sensient Technologies
If you would invest 6,993 in Sensient Technologies on November 3, 2024 and sell it today you would earn a total of 558.00 from holding Sensient Technologies or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Clean Energy vs. Sensient Technologies
Performance |
| Timeline |
| China Clean Energy |
| Sensient Technologies |
China Clean and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Sensient Technologies
The main advantage of trading using opposite China Clean and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean 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.| China Clean vs. SLR Investment Corp | China Clean vs. Artisan Partners Asset | China Clean vs. Carlyle Group | China Clean vs. Data3 Limited |
| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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