Correlation Between SentinelOne and Acacia Research
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Acacia Research 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 Acacia Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Acacia Research, you can compare the effects of market volatilities on SentinelOne and Acacia Research 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 Acacia Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Acacia Research.
Diversification Opportunities for SentinelOne and Acacia Research
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SentinelOne and Acacia is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Acacia Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acacia Research 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 Acacia Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acacia Research has no effect on the direction of SentinelOne i.e., SentinelOne and Acacia Research go up and down completely randomly.
Pair Corralation between SentinelOne and Acacia Research
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.5 times more return on investment than Acacia Research. However, SentinelOne is 1.5 times more volatile than Acacia Research. It trades about 0.07 of its potential returns per unit of risk. Acacia Research is currently generating about 0.01 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Acacia Research
Performance |
| Timeline |
| SentinelOne |
| Acacia Research |
SentinelOne and Acacia Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Acacia Research
The main advantage of trading using opposite SentinelOne and Acacia Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Acacia Research 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 Acacia Research will offset losses from the drop in Acacia Research's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Acacia Research vs. Ennis Inc | Acacia Research vs. HNI Corp | Acacia Research vs. Steelcase | Acacia Research vs. Acco Brands |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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