Correlation Between CN Energy and SenesTech

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

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

Diversification Opportunities for CN Energy and SenesTech

0.9

Correlation Coefficient

CN Energy  SenesTech

Almost no diversification

The 3 months correlation between CNEY and SenesTech is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CN Energy Group and SenesTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenesTech and CN Energy 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 CN Energy Group are associated (or correlated) with SenesTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenesTech has no effect on the direction of CN Energy i.e., CN Energy and SenesTech go up and down completely randomly.

Pair Corralation between CN Energy and SenesTech

Given the investment horizon of 90 days CN Energy Group is expected to under-perform the SenesTech. But the stock apears to be less risky and, when comparing its historical volatility, CN Energy Group is 1.12 times less risky than SenesTech. The stock trades about -0.02 of its potential returns per unit of risk. The SenesTech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  302.00  in SenesTech on February 11, 2025 and sell it today you would lose (31.00) from holding SenesTech or give up 10.26% of portfolio value over 90 days.

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

CN Energy Group  vs.  SenesTech

CN Energy Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days CN Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SenesTech

Risk-Adjusted Performance

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 comparatively stable technical and fundamental indicators, SenesTech is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CN Energy and SenesTech

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

The idea behind CN Energy Group and SenesTech 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.