Correlation Between Saddle Ranch and Sensata Technologies
Can any of the company-specific risk be diversified away by investing in both Saddle Ranch 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 Saddle Ranch and Sensata Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saddle Ranch Media and Sensata Technologies Holding, you can compare the effects of market volatilities on Saddle Ranch 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 Saddle Ranch with a short position of Sensata Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saddle Ranch and Sensata Technologies.
Diversification Opportunities for Saddle Ranch and Sensata Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saddle and Sensata is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Saddle Ranch Media and Sensata Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensata Technologies and Saddle Ranch 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 Saddle Ranch Media 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 Saddle Ranch i.e., Saddle Ranch and Sensata Technologies go up and down completely randomly.
Pair Corralation between Saddle Ranch and Sensata Technologies
Given the investment horizon of 90 days Saddle Ranch Media is expected to generate 9.57 times more return on investment than Sensata Technologies. However, Saddle Ranch is 9.57 times more volatile than Sensata Technologies Holding. It trades about 0.06 of its potential returns per unit of risk. Sensata Technologies Holding is currently generating about 0.0 per unit of risk. If you would invest 0.02 in Saddle Ranch Media on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Saddle Ranch Media or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Saddle Ranch Media vs. Sensata Technologies Holding
Performance |
| Timeline |
| Saddle Ranch Media |
| Sensata Technologies |
Saddle Ranch and Sensata Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saddle Ranch and Sensata Technologies
The main advantage of trading using opposite Saddle Ranch and Sensata Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saddle Ranch 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.| Saddle Ranch vs. Focus Universal | Saddle Ranch vs. ESCO Technologies | Saddle Ranch vs. Genasys | Saddle Ranch vs. Ultrack Systems |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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