Correlation Between Sensata Technologies and Badger Meter
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Badger Meter 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 Badger Meter 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 Badger Meter, you can compare the effects of market volatilities on Sensata Technologies and Badger Meter 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 Badger Meter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Badger Meter.
Diversification Opportunities for Sensata Technologies and Badger Meter
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensata and Badger is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Badger Meter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Meter 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 Badger Meter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Meter has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Badger Meter go up and down completely randomly.
Pair Corralation between Sensata Technologies and Badger Meter
Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to generate 1.02 times more return on investment than Badger Meter. However, Sensata Technologies is 1.02 times more volatile than Badger Meter. It trades about 0.16 of its potential returns per unit of risk. Badger Meter is currently generating about -0.03 per unit of risk. If you would invest 2,744 in Sensata Technologies Holding on October 22, 2024 and sell it today you would earn a total of 98.00 from holding Sensata Technologies Holding or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Badger Meter
Performance |
| Timeline |
| Sensata Technologies |
| Badger Meter |
Sensata Technologies and Badger Meter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Badger Meter
The main advantage of trading using opposite Sensata Technologies and Badger Meter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Badger Meter 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 Badger Meter will offset losses from the drop in Badger Meter's long position.| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
| Badger Meter vs. ESCO Technologies | Badger Meter vs. Novanta | Badger Meter vs. Sensata Technologies Holding | Badger Meter vs. Fortive Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |