Correlation Between Sentronic International and Casing Macron

Can any of the company-specific risk be diversified away by investing in both Sentronic International and Casing Macron 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 Sentronic International and Casing Macron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sentronic International and Casing Macron Technology, you can compare the effects of market volatilities on Sentronic International and Casing Macron 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 Sentronic International with a short position of Casing Macron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentronic International and Casing Macron.

Diversification Opportunities for Sentronic International and Casing Macron

0.73

Correlation Coefficient

Sentronic International  Casing Macron

Poor diversification

The 3 months correlation between Sentronic and Casing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sentronic International and Casing Macron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casing Macron Technology and Sentronic International 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 Sentronic International are associated (or correlated) with Casing Macron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casing Macron Technology has no effect on the direction of Sentronic International i.e., Sentronic International and Casing Macron go up and down completely randomly.

Pair Corralation between Sentronic International and Casing Macron

Assuming the 90 days trading horizon Sentronic International is expected to under-perform the Casing Macron. But the stock apears to be less risky and, when comparing its historical volatility, Sentronic International is 1.18 times less risky than Casing Macron. The stock trades about -0.1 of its potential returns per unit of risk. The Casing Macron Technology is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,265  in Casing Macron Technology on September 20, 2024 and sell it today you would lose (320.00) from holding Casing Macron Technology or give up 14.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Sentronic International  vs.  Casing Macron Technology

Sentronic International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentronic International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Casing Macron Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casing Macron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sentronic International and Casing Macron

The main advantage of trading using opposite Sentronic International and Casing Macron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentronic International position performs unexpectedly, Casing Macron 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 Casing Macron will offset losses from the drop in Casing Macron's long position.

The idea behind Sentronic International and Casing Macron Technology 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.

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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.