Correlation Between STRYKER and Sensient Technologies
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By analyzing existing cross correlation between STRYKER P 41 and Sensient Technologies, you can compare the effects of market volatilities on STRYKER 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 STRYKER with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRYKER and Sensient Technologies.
Diversification Opportunities for STRYKER and Sensient Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STRYKER and Sensient is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding STRYKER P 41 and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and STRYKER 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 STRYKER P 41 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 STRYKER i.e., STRYKER and Sensient Technologies go up and down completely randomly.
Pair Corralation between STRYKER and Sensient Technologies
Assuming the 90 days trading horizon STRYKER P 41 is expected to under-perform the Sensient Technologies. But the bond apears to be less risky and, when comparing its historical volatility, STRYKER P 41 is 1.7 times less risky than Sensient Technologies. The bond trades about -0.07 of its potential returns per unit of risk. The Sensient Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,523 in Sensient Technologies on September 2, 2024 and sell it today you would earn a total of 241.00 from holding Sensient Technologies or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 38.1% |
| Values | Daily Returns |
STRYKER P 41 vs. Sensient Technologies
Performance |
| Timeline |
| STRYKER P 41 |
| Sensient Technologies |
STRYKER and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRYKER and Sensient Technologies
The main advantage of trading using opposite STRYKER and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRYKER 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.| STRYKER vs. BW Offshore Limited | STRYKER vs. Taiwan Semiconductor Manufacturing | STRYKER vs. Eastman Kodak Co | STRYKER vs. Stepan Company |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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