Correlation Between Sensata Technologies and Mind Technology
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Mind 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 Mind 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 Mind Technology, you can compare the effects of market volatilities on Sensata Technologies and Mind 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 Mind Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Mind Technology.
Diversification Opportunities for Sensata Technologies and Mind Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensata and Mind is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind 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 Mind Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Technology has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Mind Technology go up and down completely randomly.
Pair Corralation between Sensata Technologies and Mind Technology
Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to under-perform the Mind Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sensata Technologies Holding is 4.92 times less risky than Mind Technology. The stock trades about -0.16 of its potential returns per unit of risk. The Mind Technology is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 389.00 in Mind Technology on September 18, 2024 and sell it today you would earn a total of 329.00 from holding Mind Technology or generate 84.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Mind Technology
Performance |
| Timeline |
| Sensata Technologies |
| Mind Technology |
Sensata Technologies and Mind Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Mind Technology
The main advantage of trading using opposite Sensata Technologies and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Mind 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 Mind Technology will offset losses from the drop in Mind Technology's long position.| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
| Mind Technology vs. Spectris plc | Mind Technology vs. Electro Sensors | Mind Technology vs. Sono Tek Corp | Mind Technology 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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