Correlation Between Sensient Technologies and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Aldel Financial 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 Aldel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Aldel Financial II, you can compare the effects of market volatilities on Sensient Technologies and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Aldel Financial.
Diversification Opportunities for Sensient Technologies and Aldel Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sensient and Aldel is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Aldel Financial go up and down completely randomly.
Pair Corralation between Sensient Technologies and Aldel Financial
Considering the 90-day investment horizon Sensient Technologies is expected to under-perform the Aldel Financial. In addition to that, Sensient Technologies is 9.42 times more volatile than Aldel Financial II. It trades about -0.19 of its total potential returns per unit of risk. Aldel Financial II is currently generating about 0.08 per unit of volatility. If you would invest 999.00 in Aldel Financial II on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Aldel Financial II or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Aldel Financial II
Performance |
| Timeline |
| Sensient Technologies |
| Aldel Financial II |
Sensient Technologies and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Aldel Financial
The main advantage of trading using opposite Sensient Technologies and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. CO2 Energy Transition |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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