Correlation Between Senseonics Holdings and Penumbra

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

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

Diversification Opportunities for Senseonics Holdings and Penumbra

-0.67

Correlation Coefficient

Senseonics Holdings  Penumbra

Excellent diversification

The 3 months correlation between Senseonics and Penumbra is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Senseonics Holdings and Penumbra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penumbra and Senseonics Holdings 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 Senseonics Holdings are associated (or correlated) with Penumbra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penumbra has no effect on the direction of Senseonics Holdings i.e., Senseonics Holdings and Penumbra go up and down completely randomly.

Pair Corralation between Senseonics Holdings and Penumbra

Given the investment horizon of 90 days Senseonics Holdings is expected to under-perform the Penumbra. In addition to that, Senseonics Holdings is 2.03 times more volatile than Penumbra. It trades about -0.06 of its total potential returns per unit of risk. Penumbra is currently generating about 0.14 per unit of volatility. If you would invest  20,232  in Penumbra on August 30, 2024 and sell it today you would earn a total of  4,183  from holding Penumbra or generate 20.68% return on investment over 90 days.

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

Senseonics Holdings  vs.  Penumbra

Senseonics Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senseonics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Penumbra

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penumbra are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Penumbra displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Senseonics Holdings and Penumbra

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

The idea behind Senseonics Holdings and Penumbra 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 CEOs Directory module to screen CEOs from public companies around the world.