Correlation Between SentinelOne and Home Depot
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Home Depot 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 Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Home Depot, you can compare the effects of market volatilities on SentinelOne and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Home Depot.
Diversification Opportunities for SentinelOne and Home Depot
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SentinelOne and Home is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of SentinelOne i.e., SentinelOne and Home Depot go up and down completely randomly.
Pair Corralation between SentinelOne and Home Depot
Taking into account the 90-day investment horizon SentinelOne is expected to generate 4.01 times more return on investment than Home Depot. However, SentinelOne is 4.01 times more volatile than Home Depot. It trades about 0.07 of its potential returns per unit of risk. Home Depot is currently generating about 0.03 per unit of risk. If you would invest 1,492 in SentinelOne on August 31, 2024 and sell it today you would earn a total of 1,303 from holding SentinelOne or generate 87.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
SentinelOne vs. Home Depot
Performance |
| Timeline |
| SentinelOne |
| Home Depot |
SentinelOne and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Home Depot
The main advantage of trading using opposite SentinelOne and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Home Depot vs. Toyota Motor Corp | Home Depot vs. SoftBank Group Corp | Home Depot vs. OTP Bank Nyrt | Home Depot vs. Las Vegas Sands |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |