Correlation Between Aeye and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Aeye 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 Aeye and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and SentinelOne, you can compare the effects of market volatilities on Aeye 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 Aeye with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and SentinelOne.
Diversification Opportunities for Aeye and SentinelOne
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeye and SentinelOne is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Aeye 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 Aeye Inc 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 Aeye i.e., Aeye and SentinelOne go up and down completely randomly.
Pair Corralation between Aeye and SentinelOne
Given the investment horizon of 90 days Aeye Inc is expected to under-perform the SentinelOne. In addition to that, Aeye is 1.5 times more volatile than SentinelOne. It trades about -0.12 of its total potential returns per unit of risk. SentinelOne is currently generating about 0.1 per unit of volatility. If you would invest 2,489 in SentinelOne on August 25, 2024 and sell it today you would earn a total of 365.00 from holding SentinelOne or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. SentinelOne
Performance |
| Timeline |
| Aeye Inc |
| SentinelOne |
Aeye and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and SentinelOne
The main advantage of trading using opposite Aeye and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye 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.The idea behind Aeye Inc and SentinelOne 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.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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