Correlation Between CHRISTUS and Sensient Technologies
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By analyzing existing cross correlation between CHRISTUS HEALTH 4341 and Sensient Technologies, you can compare the effects of market volatilities on CHRISTUS and Sensient Technologies 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 CHRISTUS with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRISTUS and Sensient Technologies.
Diversification Opportunities for CHRISTUS and Sensient Technologies
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHRISTUS and Sensient is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CHRISTUS HEALTH 4341 and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and CHRISTUS 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 CHRISTUS HEALTH 4341 are associated (or correlated) with Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of CHRISTUS i.e., CHRISTUS and Sensient Technologies go up and down completely randomly.
Pair Corralation between CHRISTUS and Sensient Technologies
Assuming the 90 days trading horizon CHRISTUS HEALTH 4341 is expected to generate 0.46 times more return on investment than Sensient Technologies. However, CHRISTUS HEALTH 4341 is 2.18 times less risky than Sensient Technologies. It trades about -0.27 of its potential returns per unit of risk. Sensient Technologies is currently generating about -0.2 per unit of risk. If you would invest 9,829 in CHRISTUS HEALTH 4341 on November 27, 2024 and sell it today you would lose (296.00) from holding CHRISTUS HEALTH 4341 or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
CHRISTUS HEALTH 4341 vs. Sensient Technologies
Performance |
| Timeline |
| CHRISTUS HEALTH 4341 |
| Sensient Technologies |
CHRISTUS and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHRISTUS and Sensient Technologies
The main advantage of trading using opposite CHRISTUS and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRISTUS position performs unexpectedly, Sensient Technologies 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.The idea behind CHRISTUS HEALTH 4341 and Sensient Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
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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