Correlation Between SenesTech and CN Energy

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

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

Diversification Opportunities for SenesTech and CN Energy

0.07

Correlation Coefficient

SenesTech  CN Energy

Significant diversification

The 3 months correlation between SenesTech and CNEY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SenesTech and CN Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN Energy Group and SenesTech 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 SenesTech are associated (or correlated) with CN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN Energy Group has no effect on the direction of SenesTech i.e., SenesTech and CN Energy go up and down completely randomly.

Pair Corralation between SenesTech and CN Energy

Given the investment horizon of 90 days SenesTech is expected to under-perform the CN Energy. But the stock apears to be less risky and, when comparing its historical volatility, SenesTech is 7.14 times less risky than CN Energy. The stock trades about -0.03 of its potential returns per unit of risk. The CN Energy Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  29.00  in CN Energy Group on September 7, 2024 and sell it today you would earn a total of  6.00  from holding CN Energy Group or generate 20.69% return on investment over 90 days.

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

SenesTech  vs.  CN Energy Group

SenesTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SenesTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CN Energy Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CN Energy Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, CN Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SenesTech and CN Energy

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

The idea behind SenesTech and CN Energy Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.