Correlation Between Sensient Technologies and Rogers
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Rogers 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 Rogers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Rogers, you can compare the effects of market volatilities on Sensient Technologies and Rogers 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 Rogers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Rogers.
Diversification Opportunities for Sensient Technologies and Rogers
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sensient and Rogers is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Rogers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers 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 Rogers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Rogers go up and down completely randomly.
Pair Corralation between Sensient Technologies and Rogers
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.95 times more return on investment than Rogers. However, Sensient Technologies is 1.05 times less risky than Rogers. It trades about 0.24 of its potential returns per unit of risk. Rogers is currently generating about -0.17 per unit of risk. If you would invest 6,993 in Sensient Technologies on November 3, 2024 and sell it today you would earn a total of 558.00 from holding Sensient Technologies or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Rogers
Performance |
| Timeline |
| Sensient Technologies |
| Rogers |
Sensient Technologies and Rogers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Rogers
The main advantage of trading using opposite Sensient Technologies and Rogers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Rogers 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 Rogers will offset losses from the drop in Rogers' long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| Rogers vs. Pearson PLC ADR | Rogers vs. Zane Interactive Publishing | Rogers vs. Western Acquisition Ventures | Rogers vs. 51Talk Online Education |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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