Correlation Between Mace Security and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Mace Security 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 Mace Security and Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mace Security Intl and Sensient Technologies, you can compare the effects of market volatilities on Mace Security 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 Mace Security with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mace Security and Sensient Technologies.
Diversification Opportunities for Mace Security and Sensient Technologies
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mace and Sensient is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mace Security Intl and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and Mace Security 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 Mace Security Intl 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 Mace Security i.e., Mace Security and Sensient Technologies go up and down completely randomly.
Pair Corralation between Mace Security and Sensient Technologies
If you would invest 5.00 in Mace Security Intl on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Mace Security Intl or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Mace Security Intl vs. Sensient Technologies
Performance |
| Timeline |
| Mace Security Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sensient Technologies |
Mace Security and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mace Security and Sensient Technologies
The main advantage of trading using opposite Mace Security and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mace Security 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.| Mace Security vs. CompX International | Mace Security vs. Mistras Group | Mace Security vs. MSA Safety | Mace Security vs. Brinks Company |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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