Correlation Between Sensient Technologies and NUCOR
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By analyzing existing cross correlation between Sensient Technologies and NUCOR P 395, you can compare the effects of market volatilities on Sensient Technologies and NUCOR 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 NUCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and NUCOR.
Diversification Opportunities for Sensient Technologies and NUCOR
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sensient and NUCOR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and NUCOR P 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUCOR P 5 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 NUCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUCOR P 5 has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and NUCOR go up and down completely randomly.
Pair Corralation between Sensient Technologies and NUCOR
Considering the 90-day investment horizon Sensient Technologies is expected to generate 3.86 times more return on investment than NUCOR. However, Sensient Technologies is 3.86 times more volatile than NUCOR P 395. It trades about 0.03 of its potential returns per unit of risk. NUCOR P 395 is currently generating about 0.02 per unit of risk. If you would invest 6,686 in Sensient Technologies on September 12, 2024 and sell it today you would earn a total of 1,114 from holding Sensient Technologies or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.58% |
| Values | Daily Returns |
Sensient Technologies vs. NUCOR P 395
Performance |
| Timeline |
| Sensient Technologies |
| NUCOR P 5 |
Sensient Technologies and NUCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and NUCOR
The main advantage of trading using opposite Sensient Technologies and NUCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, NUCOR 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 NUCOR will offset losses from the drop in NUCOR's long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| NUCOR vs. AEP TEX INC | NUCOR vs. US BANK NATIONAL | NUCOR vs. Applied Blockchain | NUCOR vs. BigBearai Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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