Correlation Between Nanalysis Scientific and Sensata Technologies
Can any of the company-specific risk be diversified away by investing in both Nanalysis Scientific and Sensata 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 Nanalysis Scientific and Sensata Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanalysis Scientific Corp and Sensata Technologies Holding, you can compare the effects of market volatilities on Nanalysis Scientific and Sensata 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 Nanalysis Scientific with a short position of Sensata Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanalysis Scientific and Sensata Technologies.
Diversification Opportunities for Nanalysis Scientific and Sensata Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanalysis and Sensata is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nanalysis Scientific Corp and Sensata Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensata Technologies and Nanalysis Scientific 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 Nanalysis Scientific Corp are associated (or correlated) with Sensata Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensata Technologies has no effect on the direction of Nanalysis Scientific i.e., Nanalysis Scientific and Sensata Technologies go up and down completely randomly.
Pair Corralation between Nanalysis Scientific and Sensata Technologies
Assuming the 90 days horizon Nanalysis Scientific Corp is expected to generate 2.57 times more return on investment than Sensata Technologies. However, Nanalysis Scientific is 2.57 times more volatile than Sensata Technologies Holding. It trades about -0.01 of its potential returns per unit of risk. Sensata Technologies Holding is currently generating about -0.06 per unit of risk. If you would invest 51.00 in Nanalysis Scientific Corp on November 2, 2024 and sell it today you would lose (29.00) from holding Nanalysis Scientific Corp or give up 56.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nanalysis Scientific Corp vs. Sensata Technologies Holding
Performance |
| Timeline |
| Nanalysis Scientific Corp |
| Sensata Technologies |
Nanalysis Scientific and Sensata Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanalysis Scientific and Sensata Technologies
The main advantage of trading using opposite Nanalysis Scientific and Sensata Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanalysis Scientific position performs unexpectedly, Sensata 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 Sensata Technologies will offset losses from the drop in Sensata Technologies' long position.| Nanalysis Scientific vs. Genasys | Nanalysis Scientific vs. Kraken Robotics | Nanalysis Scientific vs. ESCO Technologies | Nanalysis Scientific vs. Know Labs |
| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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