Correlation Between Sensient Technologies and Mountain Crest
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Mountain Crest 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 Mountain Crest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Mountain Crest Acquisition, you can compare the effects of market volatilities on Sensient Technologies and Mountain Crest 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 Mountain Crest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Mountain Crest.
Diversification Opportunities for Sensient Technologies and Mountain Crest
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensient and Mountain is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui 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 Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Mountain Crest go up and down completely randomly.
Pair Corralation between Sensient Technologies and Mountain Crest
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.07 times more return on investment than Mountain Crest. However, Sensient Technologies is 13.46 times less risky than Mountain Crest. It trades about 0.01 of its potential returns per unit of risk. Mountain Crest Acquisition is currently generating about -0.24 per unit of risk. If you would invest 7,465 in Sensient Technologies on September 3, 2024 and sell it today you would earn a total of 380.00 from holding Sensient Technologies or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.42% |
| Values | Daily Returns |
Sensient Technologies vs. Mountain Crest Acquisition
Performance |
| Timeline |
| Sensient Technologies |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sensient Technologies and Mountain Crest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Mountain Crest
The main advantage of trading using opposite Sensient Technologies and Mountain Crest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Mountain Crest 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 Mountain Crest will offset losses from the drop in Mountain Crest's long position.| Sensient Technologies vs. SPACE | Sensient Technologies vs. Bayview Acquisition Corp | Sensient Technologies vs. T Rowe Price | Sensient Technologies vs. Ampleforth |
| Mountain Crest vs. Yuexiu Transport Infrastructure | Mountain Crest vs. Park Hotels Resorts | Mountain Crest vs. Starbucks | Mountain Crest vs. Meli Hotels International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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