Correlation Between Sensata Technologies and Energous
Can any of the company-specific risk be diversified away by investing in both Sensata Technologies and Energous 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 Energous 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 Energous, you can compare the effects of market volatilities on Sensata Technologies and Energous 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 Energous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Energous.
Diversification Opportunities for Sensata Technologies and Energous
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sensata and Energous is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous 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 Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Sensata Technologies i.e., Sensata Technologies and Energous go up and down completely randomly.
Pair Corralation between Sensata Technologies and Energous
Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to generate 0.9 times more return on investment than Energous. However, Sensata Technologies Holding is 1.11 times less risky than Energous. It trades about -0.13 of its potential returns per unit of risk. Energous is currently generating about -0.33 per unit of risk. If you would invest 3,485 in Sensata Technologies Holding on August 31, 2024 and sell it today you would lose (274.00) from holding Sensata Technologies Holding or give up 7.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Energous
Performance |
| Timeline |
| Sensata Technologies |
| Energous |
Sensata Technologies and Energous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Energous
The main advantage of trading using opposite Sensata Technologies and Energous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata Technologies position performs unexpectedly, Energous 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 Energous will offset losses from the drop in Energous' long position.| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
| Energous vs. Cepton Inc | Energous vs. SaverOne 2014 Ltd | Energous vs. Kraken Robotics | Energous vs. Focus Universal |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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