Correlation Between SentinelOne and British American
Can any of the company-specific risk be diversified away by investing in both SentinelOne and British American 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 British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and British American Tobacco, you can compare the effects of market volatilities on SentinelOne and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and British American.
Diversification Opportunities for SentinelOne and British American
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SentinelOne and British is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of SentinelOne i.e., SentinelOne and British American go up and down completely randomly.
Pair Corralation between SentinelOne and British American
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.47 times more return on investment than British American. However, SentinelOne is 2.47 times more volatile than British American Tobacco. It trades about 0.06 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.05 per unit of risk. If you would invest 1,983 in SentinelOne on August 27, 2024 and sell it today you would earn a total of 871.00 from holding SentinelOne or generate 43.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
SentinelOne vs. British American Tobacco
Performance |
| Timeline |
| SentinelOne |
| British American Tobacco |
SentinelOne and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and British American
The main advantage of trading using opposite SentinelOne and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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