Correlation Between SentinelOne and American Airlines
Can any of the company-specific risk be diversified away by investing in both SentinelOne and American Airlines 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 American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and American Airlines Group, you can compare the effects of market volatilities on SentinelOne and American Airlines 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 American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and American Airlines.
Diversification Opportunities for SentinelOne and American Airlines
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SentinelOne and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of SentinelOne i.e., SentinelOne and American Airlines go up and down completely randomly.
Pair Corralation between SentinelOne and American Airlines
Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.73 times more return on investment than American Airlines. However, SentinelOne is 1.38 times less risky than American Airlines. It trades about -0.2 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.17 per unit of risk. If you would invest 2,011 in SentinelOne on January 22, 2025 and sell it today you would lose (376.00) from holding SentinelOne or give up 18.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
SentinelOne vs. American Airlines Group
Performance |
| Timeline |
| SentinelOne |
| American Airlines |
SentinelOne and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and American Airlines
The main advantage of trading using opposite SentinelOne and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Adobe Systems Incorporated | SentinelOne vs. Crowdstrike Holdings |
| American Airlines vs. Extra Space Storage | American Airlines vs. Datadog, | American Airlines vs. Bemobi Mobile Tech | American Airlines vs. Roper Technologies, |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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