Correlation Between Richardson Electronics and Senstar Technologies
Can any of the company-specific risk be diversified away by investing in both Richardson Electronics and Senstar 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 Richardson Electronics and Senstar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richardson Electronics and Senstar Technologies, you can compare the effects of market volatilities on Richardson Electronics and Senstar 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 Richardson Electronics with a short position of Senstar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richardson Electronics and Senstar Technologies.
Diversification Opportunities for Richardson Electronics and Senstar Technologies
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Richardson and Senstar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Richardson Electronics and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies and Richardson Electronics 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 Richardson Electronics are associated (or correlated) with Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Richardson Electronics i.e., Richardson Electronics and Senstar Technologies go up and down completely randomly.
Pair Corralation between Richardson Electronics and Senstar Technologies
Given the investment horizon of 90 days Richardson Electronics is expected to under-perform the Senstar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Richardson Electronics is 1.33 times less risky than Senstar Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Senstar Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Senstar Technologies on November 1, 2024 and sell it today you would earn a total of 255.00 from holding Senstar Technologies or generate 188.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Richardson Electronics vs. Senstar Technologies
Performance |
| Timeline |
| Richardson Electronics |
| Senstar Technologies |
Richardson Electronics and Senstar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richardson Electronics and Senstar Technologies
The main advantage of trading using opposite Richardson Electronics and Senstar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richardson Electronics position performs unexpectedly, Senstar 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 Senstar Technologies will offset losses from the drop in Senstar Technologies' long position.| Richardson Electronics vs. Rigetti Computing | Richardson Electronics vs. IONQ WT | Richardson Electronics vs. Arqit Quantum Warrants | Richardson Electronics vs. QBTS WT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |