Correlation Between Via Renewables and Senstar Technologies
Can any of the company-specific risk be diversified away by investing in both Via Renewables and Senstar Technologies 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 Via Renewables and Senstar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Senstar Technologies, you can compare the effects of market volatilities on Via Renewables and Senstar 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 Via Renewables with a short position of Senstar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Senstar Technologies.
Diversification Opportunities for Via Renewables and Senstar Technologies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Via and Senstar is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies and Via Renewables 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 Via Renewables are associated (or correlated) with Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Via Renewables i.e., Via Renewables and Senstar Technologies go up and down completely randomly.
Pair Corralation between Via Renewables and Senstar Technologies
Assuming the 90 days horizon Via Renewables is expected to generate 12.66 times less return on investment than Senstar Technologies. But when comparing it to its historical volatility, Via Renewables is 4.24 times less risky than Senstar Technologies. It trades about 0.1 of its potential returns per unit of risk. Senstar Technologies is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Senstar Technologies on August 26, 2024 and sell it today you would earn a total of 140.00 from holding Senstar Technologies or generate 88.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. Senstar Technologies
Performance |
| Timeline |
| Via Renewables |
| Senstar Technologies |
Via Renewables and Senstar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and Senstar Technologies
The main advantage of trading using opposite Via Renewables and Senstar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Senstar 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 Senstar Technologies will offset losses from the drop in Senstar Technologies' long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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