Correlation Between Spectris Plc and Electro Sensors
Can any of the company-specific risk be diversified away by investing in both Spectris Plc and Electro Sensors 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 Spectris Plc and Electro Sensors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectris plc and Electro Sensors, you can compare the effects of market volatilities on Spectris Plc and Electro Sensors 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 Spectris Plc with a short position of Electro Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectris Plc and Electro Sensors.
Diversification Opportunities for Spectris Plc and Electro Sensors
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spectris and Electro is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Spectris plc and Electro Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Sensors and Spectris Plc 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 Spectris plc are associated (or correlated) with Electro Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Sensors has no effect on the direction of Spectris Plc i.e., Spectris Plc and Electro Sensors go up and down completely randomly.
Pair Corralation between Spectris Plc and Electro Sensors
Assuming the 90 days horizon Spectris plc is expected to generate 1.74 times more return on investment than Electro Sensors. However, Spectris Plc is 1.74 times more volatile than Electro Sensors. It trades about 0.05 of its potential returns per unit of risk. Electro Sensors is currently generating about 0.04 per unit of risk. If you would invest 3,807 in Spectris plc on May 1, 2025 and sell it today you would earn a total of 1,393 from holding Spectris plc or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.89% |
| Values | Daily Returns |
Spectris plc vs. Electro Sensors
Performance |
| Timeline |
| Spectris plc |
| Electro Sensors |
Spectris Plc and Electro Sensors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectris Plc and Electro Sensors
The main advantage of trading using opposite Spectris Plc and Electro Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectris Plc position performs unexpectedly, Electro Sensors 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 Electro Sensors will offset losses from the drop in Electro Sensors' long position.| Spectris Plc vs. Electro Sensors | Spectris Plc vs. Sono Tek Corp | Spectris Plc vs. Vishay Precision Group | Spectris Plc vs. Keyence |
| Electro Sensors vs. Spectris plc | Electro Sensors vs. Track Group | Electro Sensors vs. Sono Tek Corp | Electro Sensors vs. Nortech Systems Incorporated |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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