Correlation Between Sensient Technologies and Universal Electronics
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies and Universal Electronics 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 Universal Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Universal Electronics, you can compare the effects of market volatilities on Sensient Technologies and Universal Electronics 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 Universal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Universal Electronics.
Diversification Opportunities for Sensient Technologies and Universal Electronics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sensient and Universal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Universal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Electronics 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 Universal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Electronics has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Universal Electronics go up and down completely randomly.
Pair Corralation between Sensient Technologies and Universal Electronics
Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.35 times more return on investment than Universal Electronics. However, Sensient Technologies is 2.84 times less risky than Universal Electronics. It trades about 0.23 of its potential returns per unit of risk. Universal Electronics is currently generating about -0.1 per unit of risk. If you would invest 9,418 in Sensient Technologies on May 30, 2025 and sell it today you would earn a total of 2,062 from holding Sensient Technologies or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Universal Electronics
Performance |
| Timeline |
| Sensient Technologies |
| Universal Electronics |
Sensient Technologies and Universal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Universal Electronics
The main advantage of trading using opposite Sensient Technologies and Universal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies position performs unexpectedly, Universal Electronics 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 Universal Electronics will offset losses from the drop in Universal Electronics' long position.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| Universal Electronics vs. LG Display Co | Universal Electronics vs. Emerson Radio | Universal Electronics vs. United Fire Group | Universal Electronics vs. Univest Pennsylvania |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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