Correlation Between Adobe Systems and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Adobe Systems and SentinelOne 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 Adobe Systems and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adobe Systems Incorporated and SentinelOne, you can compare the effects of market volatilities on Adobe Systems and SentinelOne 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 Adobe Systems with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adobe Systems and SentinelOne.
Diversification Opportunities for Adobe Systems and SentinelOne
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adobe and SentinelOne is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Adobe Systems Incorporated and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Adobe Systems 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 Adobe Systems Incorporated are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Adobe Systems i.e., Adobe Systems and SentinelOne go up and down completely randomly.
Pair Corralation between Adobe Systems and SentinelOne
Given the investment horizon of 90 days Adobe Systems is expected to generate 3.05 times less return on investment than SentinelOne. But when comparing it to its historical volatility, Adobe Systems Incorporated is 1.29 times less risky than SentinelOne. It trades about 0.04 of its potential returns per unit of risk. SentinelOne is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,589 in SentinelOne on August 23, 2024 and sell it today you would earn a total of 118.00 from holding SentinelOne or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adobe Systems Incorporated vs. SentinelOne
Performance |
| Timeline |
| Adobe Systems |
| SentinelOne |
Adobe Systems and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adobe Systems and SentinelOne
The main advantage of trading using opposite Adobe Systems and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adobe Systems position performs unexpectedly, SentinelOne 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 SentinelOne will offset losses from the drop in SentinelOne's long position.| Adobe Systems vs. Crowdstrike Holdings | Adobe Systems vs. Palantir Technologies | Adobe Systems vs. Zscaler | Adobe Systems vs. Palo Alto Networks |
| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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