Correlation Between SentinelOne and BYD
Can any of the company-specific risk be diversified away by investing in both SentinelOne and BYD 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 BYD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and BYD Co, you can compare the effects of market volatilities on SentinelOne and BYD 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 BYD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and BYD.
Diversification Opportunities for SentinelOne and BYD
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SentinelOne and BYD is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and BYD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co 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 BYD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of SentinelOne i.e., SentinelOne and BYD go up and down completely randomly.
Pair Corralation between SentinelOne and BYD
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.61 times less return on investment than BYD. But when comparing it to its historical volatility, SentinelOne is 5.02 times less risky than BYD. It trades about 0.16 of its potential returns per unit of risk. BYD Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,683 in BYD Co on September 1, 2024 and sell it today you would earn a total of 877.00 from holding BYD Co or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.92% |
| Values | Daily Returns |
SentinelOne vs. BYD Co
Performance |
| Timeline |
| SentinelOne |
| BYD Co |
SentinelOne and BYD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and BYD
The main advantage of trading using opposite SentinelOne and BYD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, BYD 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 BYD will offset losses from the drop in BYD's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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