Correlation Between SENSATA and AKITA Drilling
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By analyzing existing cross correlation between SENSATA TECHNOLOGIES INC and AKITA Drilling, you can compare the effects of market volatilities on SENSATA and AKITA Drilling 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 SENSATA with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENSATA and AKITA Drilling.
Diversification Opportunities for SENSATA and AKITA Drilling
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SENSATA and AKITA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SENSATA TECHNOLOGIES INC and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and SENSATA 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 SENSATA TECHNOLOGIES INC are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of SENSATA i.e., SENSATA and AKITA Drilling go up and down completely randomly.
Pair Corralation between SENSATA and AKITA Drilling
Assuming the 90 days trading horizon SENSATA TECHNOLOGIES INC is expected to under-perform the AKITA Drilling. But the bond apears to be less risky and, when comparing its historical volatility, SENSATA TECHNOLOGIES INC is 5.61 times less risky than AKITA Drilling. The bond trades about -0.01 of its potential returns per unit of risk. The AKITA Drilling is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 109.00 in AKITA Drilling on September 1, 2024 and sell it today you would earn a total of 6.00 from holding AKITA Drilling or generate 5.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 94.26% |
Values | Daily Returns |
SENSATA TECHNOLOGIES INC vs. AKITA Drilling
Performance |
Timeline |
SENSATA TECHNOLOGIES INC |
AKITA Drilling |
SENSATA and AKITA Drilling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SENSATA and AKITA Drilling
The main advantage of trading using opposite SENSATA and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENSATA position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.SENSATA vs. AEP TEX INC | SENSATA vs. US BANK NATIONAL | SENSATA vs. FactSet Research Systems | SENSATA vs. Golden Agri Resources |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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