Correlation Between Sensient Technologies and AeroCentury Corp
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and AeroCentury Corp 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 Sensient Technologies and AeroCentury Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and AeroCentury Corp, you can compare the effects of market volatilities on Sensient Technologies and AeroCentury Corp 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 Sensient Technologies with a short position of AeroCentury Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and AeroCentury Corp.
Diversification Opportunities for Sensient Technologies and AeroCentury Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sensient and AeroCentury is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and AeroCentury Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroCentury Corp and Sensient 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 Sensient Technologies are associated (or correlated) with AeroCentury Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroCentury Corp has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and AeroCentury Corp go up and down completely randomly.
Pair Corralation between Sensient Technologies and AeroCentury Corp
If you would invest 6,766 in Sensient Technologies on December 4, 2024 and sell it today you would earn a total of 105.00 from holding Sensient Technologies or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sensient Technologies vs. AeroCentury Corp
Performance |
| Timeline |
| Sensient Technologies |
| AeroCentury Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Sensient Technologies and AeroCentury Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and AeroCentury Corp
The main advantage of trading using opposite Sensient Technologies and AeroCentury Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, AeroCentury Corp 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 AeroCentury Corp will offset losses from the drop in AeroCentury Corp's long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| AeroCentury Corp vs. Evertz Technologies Limited | AeroCentury Corp vs. Eddy Smart Home | AeroCentury Corp vs. Sphere 3D Corp | AeroCentury Corp vs. Autohome |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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