Correlation Between Sensient Technologies and Oil Dri
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Oil Dri 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 Sensient Technologies and Oil Dri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Oil Dri, you can compare the effects of market volatilities on Sensient Technologies and Oil Dri 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 Sensient Technologies with a short position of Oil Dri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Oil Dri.
Diversification Opportunities for Sensient Technologies and Oil Dri
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sensient and Oil is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Oil Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Dri and Sensient Technologies 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 Sensient Technologies are associated (or correlated) with Oil Dri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Dri has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Oil Dri go up and down completely randomly.
Pair Corralation between Sensient Technologies and Oil Dri
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.74 times more return on investment than Oil Dri. However, Sensient Technologies is 1.34 times less risky than Oil Dri. It trades about 0.19 of its potential returns per unit of risk. Oil Dri is currently generating about 0.07 per unit of risk. If you would invest 9,636 in Sensient Technologies on June 9, 2025 and sell it today you would earn a total of 1,648 from holding Sensient Technologies or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Oil Dri
Performance |
| Timeline |
| Sensient Technologies |
| Oil Dri |
Sensient Technologies and Oil Dri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Oil Dri
The main advantage of trading using opposite Sensient Technologies and Oil Dri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Oil Dri 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 Oil Dri will offset losses from the drop in Oil Dri's long position.| Sensient Technologies vs. Core Molding Technologies | Sensient Technologies vs. Neo Performance Materials | Sensient Technologies vs. Avient Corp | Sensient Technologies vs. SPAR Group |
| Oil Dri vs. H B Fuller | Oil Dri vs. Minerals Technologies | Oil Dri vs. Quaker Chemical | Oil Dri vs. Sensient Technologies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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