Correlation Between Sensient Technologies and Delta Air

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

By analyzing existing cross correlation between Sensient Technologies and Delta Air Lines, you can compare the effects of market volatilities on Sensient Technologies and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Delta Air.

Diversification Opportunities for Sensient Technologies and Delta Air

0.68

Correlation Coefficient

Sensient Technologies  Delta Air

Poor diversification

The 3 months correlation between Sensient and Delta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Sensient Technologies i.e., Sensient Technologies and Delta Air go up and down completely randomly.

Pair Corralation between Sensient Technologies and Delta Air

Considering the 90-day investment horizon Sensient Technologies is expected to generate 0.44 times more return on investment than Delta Air. However, Sensient Technologies is 2.27 times less risky than Delta Air. It trades about 0.25 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.11 per unit of risk. If you would invest  9,321  in Sensient Technologies on May 3, 2025 and sell it today you would earn a total of  1,908  from holding Sensient Technologies or generate 20.47% return on investment over 90 days.

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

Sensient Technologies  vs.  Delta Air Lines

Sensient Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sensient Technologies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sensient Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Delta Air Lines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sensient Technologies and Delta Air

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

The idea behind Sensient Technologies and Delta Air Lines 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.