Correlation Between Procter Gamble and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and SentinelOne, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and SentinelOne.
Diversification Opportunities for Procter Gamble and SentinelOne
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and SentinelOne is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and SentinelOne go up and down completely randomly.
Pair Corralation between Procter Gamble and SentinelOne
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 4.71 times less return on investment than SentinelOne. But when comparing it to its historical volatility, Procter Gamble is 2.33 times less risky than SentinelOne. It trades about 0.08 of its potential returns per unit of risk. SentinelOne is currently generating about 0.16 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 224.00 from holding SentinelOne or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. SentinelOne
Performance |
| Timeline |
| Procter Gamble |
| SentinelOne |
Procter Gamble and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and SentinelOne
The main advantage of trading using opposite Procter Gamble and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Colgate Palmolive |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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