Correlation Between Sensient Technologies and Perimeter Solutions
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Perimeter Solutions 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 Perimeter Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Perimeter Solutions SA, you can compare the effects of market volatilities on Sensient Technologies and Perimeter Solutions 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 Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Perimeter Solutions.
Diversification Opportunities for Sensient Technologies and Perimeter Solutions
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sensient and Perimeter is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions 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 Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Perimeter Solutions go up and down completely randomly.
Pair Corralation between Sensient Technologies and Perimeter Solutions
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.56 times more return on investment than Perimeter Solutions. However, Sensient Technologies is 1.8 times less risky than Perimeter Solutions. It trades about 0.04 of its potential returns per unit of risk. Perimeter Solutions SA is currently generating about -0.13 per unit of risk. If you would invest 7,232 in Sensient Technologies on January 16, 2025 and sell it today you would earn a total of 254.00 from holding Sensient Technologies or generate 3.51% 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. Perimeter Solutions SA
Performance |
| Timeline |
| Sensient Technologies |
| Perimeter Solutions |
Sensient Technologies and Perimeter Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Perimeter Solutions
The main advantage of trading using opposite Sensient Technologies and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| Perimeter Solutions vs. Kronos Worldwide | Perimeter Solutions vs. Sensient Technologies | Perimeter Solutions vs. Element Solutions | Perimeter Solutions vs. Trinseo SA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |