Correlation Between Sensient Technologies and Paysafe
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Paysafe 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 Paysafe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Paysafe, you can compare the effects of market volatilities on Sensient Technologies and Paysafe 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 Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Paysafe.
Diversification Opportunities for Sensient Technologies and Paysafe
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sensient and Paysafe is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Paysafe go up and down completely randomly.
Pair Corralation between Sensient Technologies and Paysafe
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.31 times more return on investment than Paysafe. However, Sensient Technologies is 3.18 times less risky than Paysafe. It trades about 0.04 of its potential returns per unit of risk. Paysafe is currently generating about -0.01 per unit of risk. If you would invest 7,626 in Sensient Technologies on September 3, 2024 and sell it today you would earn a total of 138.00 from holding Sensient Technologies or generate 1.81% 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. Paysafe
Performance |
| Timeline |
| Sensient Technologies |
| Paysafe |
Sensient Technologies and Paysafe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Paysafe
The main advantage of trading using opposite Sensient Technologies and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Paysafe 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 Paysafe will offset losses from the drop in Paysafe's long position.| Sensient Technologies vs. SPACE | Sensient Technologies vs. Bayview Acquisition Corp | Sensient Technologies vs. T Rowe Price | Sensient Technologies vs. Ampleforth |
| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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