Correlation Between SentinelOne and Guangzhou Jinyi

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and Guangzhou Jinyi 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 SentinelOne and Guangzhou Jinyi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Guangzhou Jinyi Media, you can compare the effects of market volatilities on SentinelOne and Guangzhou Jinyi 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 SentinelOne with a short position of Guangzhou Jinyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Guangzhou Jinyi.

Diversification Opportunities for SentinelOne and Guangzhou Jinyi

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between SentinelOne and Guangzhou is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Guangzhou Jinyi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jinyi Media and SentinelOne 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 SentinelOne are associated (or correlated) with Guangzhou Jinyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jinyi Media has no effect on the direction of SentinelOne i.e., SentinelOne and Guangzhou Jinyi go up and down completely randomly.

Pair Corralation between SentinelOne and Guangzhou Jinyi

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.1 times more return on investment than Guangzhou Jinyi. However, SentinelOne is 1.1 times more volatile than Guangzhou Jinyi Media. It trades about 0.06 of its potential returns per unit of risk. Guangzhou Jinyi Media is currently generating about 0.0 per unit of risk. If you would invest  1,328  in SentinelOne on August 28, 2024 and sell it today you would earn a total of  1,460  from holding SentinelOne or generate 109.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.8%
ValuesDaily Returns

SentinelOne  vs.  Guangzhou Jinyi Media

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.
Guangzhou Jinyi Media 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Jinyi Media are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Jinyi sustained solid returns over the last few months and may actually be approaching a breakup point.

SentinelOne and Guangzhou Jinyi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and Guangzhou Jinyi

The main advantage of trading using opposite SentinelOne and Guangzhou Jinyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Guangzhou Jinyi 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 Guangzhou Jinyi will offset losses from the drop in Guangzhou Jinyi's long position.
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The idea behind SentinelOne and Guangzhou Jinyi Media 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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