Correlation Between Sensata Technologies and Genasys
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Genasys 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 Genasys 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 Genasys, you can compare the effects of market volatilities on Sensata Technologies and Genasys 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 Genasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Genasys.
Diversification Opportunities for Sensata Technologies and Genasys
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sensata and Genasys is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Genasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genasys 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 Genasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genasys has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Genasys go up and down completely randomly.
Pair Corralation between Sensata Technologies and Genasys
Allowing for the 90-day total investment horizon Sensata Technologies is expected to generate 2929.0 times less return on investment than Genasys. But when comparing it to its historical volatility, Sensata Technologies Holding is 2.21 times less risky than Genasys. It trades about 0.0 of its potential returns per unit of risk. Genasys is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Genasys on November 3, 2024 and sell it today you would earn a total of 31.00 from holding Genasys or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Genasys
Performance |
| Timeline |
| Sensata Technologies |
| Genasys |
Sensata Technologies and Genasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Genasys
The main advantage of trading using opposite Sensata Technologies and Genasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Genasys 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 Genasys will offset losses from the drop in Genasys' long position.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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