Correlation Between SentinelOne and Ally Financial
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Ally Financial 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 Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Ally Financial, you can compare the effects of market volatilities on SentinelOne and Ally Financial 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 Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Ally Financial.
Diversification Opportunities for SentinelOne and Ally Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SentinelOne and Ally is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial 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 Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of SentinelOne i.e., SentinelOne and Ally Financial go up and down completely randomly.
Pair Corralation between SentinelOne and Ally Financial
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.88 times less return on investment than Ally Financial. In addition to that, SentinelOne is 1.08 times more volatile than Ally Financial. It trades about 0.11 of its total potential returns per unit of risk. Ally Financial is currently generating about 0.23 per unit of volatility. If you would invest 3,501 in Ally Financial on August 30, 2024 and sell it today you would earn a total of 418.00 from holding Ally Financial or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Ally Financial
Performance |
| Timeline |
| SentinelOne |
| Ally Financial |
SentinelOne and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Ally Financial
The main advantage of trading using opposite SentinelOne and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Ally Financial vs. Tungsten West PLC | Ally Financial vs. Argo Group Limited | Ally Financial vs. Hardide PLC | Ally Financial vs. Versarien PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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