Correlation Between Sensata Technologies and Blacksky Technology
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Blacksky Technology 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 Sensata Technologies and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensata Technologies Holding and Blacksky Technology, you can compare the effects of market volatilities on Sensata Technologies and Blacksky Technology 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 Sensata Technologies with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Blacksky Technology.
Diversification Opportunities for Sensata Technologies and Blacksky Technology
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sensata and Blacksky is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and Sensata 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 Sensata Technologies Holding are associated (or correlated) with Blacksky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blacksky Technology has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Blacksky Technology go up and down completely randomly.
Pair Corralation between Sensata Technologies and Blacksky Technology
Allowing for the 90-day total investment horizon Sensata Technologies is expected to generate 7.41 times less return on investment than Blacksky Technology. But when comparing it to its historical volatility, Sensata Technologies Holding is 5.89 times less risky than Blacksky Technology. It trades about 0.18 of its potential returns per unit of risk. Blacksky Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,126 in Blacksky Technology on October 28, 2024 and sell it today you would earn a total of 370.00 from holding Blacksky Technology or generate 32.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Blacksky Technology
Performance |
| Timeline |
| Sensata Technologies |
| Blacksky Technology |
Sensata Technologies and Blacksky Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Blacksky Technology
The main advantage of trading using opposite Sensata Technologies and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Blacksky Technology 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 Blacksky Technology will offset losses from the drop in Blacksky Technology's long position.| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
| Blacksky Technology vs. Focus Universal | Blacksky Technology vs. ESCO Technologies | Blacksky Technology vs. Genasys | Blacksky Technology vs. Darkpulse |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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