Correlation Between Sensirion Holding and Inficon Holding

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

By analyzing existing cross correlation between Sensirion Holding AG and Inficon Holding, you can compare the effects of market volatilities on Sensirion Holding and Inficon Holding 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 Sensirion Holding with a short position of Inficon Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensirion Holding and Inficon Holding.

Diversification Opportunities for Sensirion Holding and Inficon Holding

0.88

Correlation Coefficient

Sensirion Holding  Inficon Holding

Very poor diversification

The 3 months correlation between Sensirion and Inficon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sensirion Holding AG and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon Holding and Sensirion Holding 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 Sensirion Holding AG are associated (or correlated) with Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of Sensirion Holding i.e., Sensirion Holding and Inficon Holding go up and down completely randomly.

Pair Corralation between Sensirion Holding and Inficon Holding

Assuming the 90 days trading horizon Sensirion Holding AG is expected to under-perform the Inficon Holding. In addition to that, Sensirion Holding is 1.88 times more volatile than Inficon Holding. It trades about -0.06 of its total potential returns per unit of risk. Inficon Holding is currently generating about -0.11 per unit of volatility. If you would invest  115,000  in Inficon Holding on September 17, 2024 and sell it today you would lose (13,600) from holding Inficon Holding or give up 11.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sensirion Holding AG  vs.  Inficon Holding

Sensirion Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensirion Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Inficon Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inficon Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Sensirion Holding and Inficon Holding

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

The idea behind Sensirion Holding AG and Inficon Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.