Correlation Between Senstar Technologies and IShares Broad
Can any of the company-specific risk be diversified away by investing in both Senstar Technologies and IShares Broad 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 Senstar Technologies and IShares Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senstar Technologies and iShares Broad USD, you can compare the effects of market volatilities on Senstar Technologies and IShares Broad 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 Senstar Technologies with a short position of IShares Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senstar Technologies and IShares Broad.
Diversification Opportunities for Senstar Technologies and IShares Broad
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senstar and IShares is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Senstar Technologies and iShares Broad USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Broad USD and Senstar Technologies 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 Senstar Technologies are associated (or correlated) with IShares Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Broad USD has no effect on the direction of Senstar Technologies i.e., Senstar Technologies and IShares Broad go up and down completely randomly.
Pair Corralation between Senstar Technologies and IShares Broad
Considering the 90-day investment horizon Senstar Technologies is expected to generate 10.04 times more return on investment than IShares Broad. However, Senstar Technologies is 10.04 times more volatile than iShares Broad USD. It trades about 0.11 of its potential returns per unit of risk. iShares Broad USD is currently generating about 0.13 per unit of risk. If you would invest 113.00 in Senstar Technologies on August 26, 2024 and sell it today you would earn a total of 186.00 from holding Senstar Technologies or generate 164.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senstar Technologies vs. iShares Broad USD
Performance |
| Timeline |
| Senstar Technologies |
| iShares Broad USD |
Senstar Technologies and IShares Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senstar Technologies and IShares Broad
The main advantage of trading using opposite Senstar Technologies and IShares Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senstar Technologies position performs unexpectedly, IShares Broad 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 IShares Broad will offset losses from the drop in IShares Broad's long position.The idea behind Senstar Technologies and iShares Broad USD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares Broad vs. Senstar Technologies | IShares Broad vs. ImmuCell | IShares Broad vs. Anika Therapeutics | IShares Broad vs. Aquagold International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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