Correlation Between Sensient Technologies and China Finance
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and China Finance 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 China Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and China Finance, you can compare the effects of market volatilities on Sensient Technologies and China Finance 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 China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and China Finance.
Diversification Opportunities for Sensient Technologies and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sensient and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and China Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance 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 China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and China Finance go up and down completely randomly.
Pair Corralation between Sensient Technologies and China Finance
If you would invest 6,694 in Sensient Technologies on December 11, 2024 and sell it today you would earn a total of 645.00 from holding Sensient Technologies or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. China Finance
Performance |
| Timeline |
| Sensient Technologies |
| China Finance |
Sensient Technologies and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and China Finance
The main advantage of trading using opposite Sensient Technologies and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, China Finance 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 China Finance will offset losses from the drop in China Finance's long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| China Finance vs. Strategic Education | China Finance vs. Graham Holdings Co | China Finance vs. Afya | China Finance vs. United Parks Resorts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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