Correlation Between Monument Circle and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Monument Circle 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 Monument Circle and Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Circle Acquisition and Sensient Technologies, you can compare the effects of market volatilities on Monument Circle 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 Monument Circle with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Circle and Sensient Technologies.
Diversification Opportunities for Monument Circle and Sensient Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monument and Sensient is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Monument Circle Acquisition and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and Monument Circle 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 Monument Circle Acquisition 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 Monument Circle i.e., Monument Circle and Sensient Technologies go up and down completely randomly.
Pair Corralation between Monument Circle and Sensient Technologies
If you would invest 7,534 in Sensient Technologies on September 4, 2024 and sell it today you would earn a total of 270.00 from holding Sensient Technologies or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Monument Circle Acquisition vs. Sensient Technologies
Performance |
| Timeline |
| Monument Circle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sensient Technologies |
Monument Circle and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Circle and Sensient Technologies
The main advantage of trading using opposite Monument Circle and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Circle 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.| Monument Circle vs. Sensient Technologies | Monument Circle vs. The Mosaic | Monument Circle vs. Luxfer Holdings PLC | Monument Circle vs. NL Industries |
| Sensient Technologies vs. Innospec | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller | Sensient Technologies vs. Quaker Chemical |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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