If you use an analogue sensor, pick an Arduino that has an ADC with better than 10 bit resolution otherwise you'll be limited to 0.35 degree resolution. Use the ADC internal voltage reference for better accuracy.
Your budget will need to include a flexible metal coupling to deal with runout and misalignment.
The outputs of the two sensors say 'ratio' output which may indicate a ratio-metric output, so you will need a stabilised power supply to give reliable measurements.
Lastly, will the inertia of the flexible coupling and sensor affect the thing being measured?. 6 Hz is going to require a fair bit of additional power unless you are dealing with a resonant system.