Correlation Between SentinelOne and Aura FAT
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Aura FAT 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 Aura FAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Aura FAT Projects, you can compare the effects of market volatilities on SentinelOne and Aura FAT 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 Aura FAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Aura FAT.
Diversification Opportunities for SentinelOne and Aura FAT
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Aura is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Aura FAT Projects in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura FAT Projects 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 Aura FAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura FAT Projects has no effect on the direction of SentinelOne i.e., SentinelOne and Aura FAT go up and down completely randomly.
Pair Corralation between SentinelOne and Aura FAT
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.63 times more return on investment than Aura FAT. However, SentinelOne is 2.63 times more volatile than Aura FAT Projects. It trades about 0.06 of its potential returns per unit of risk. Aura FAT Projects is currently generating about 0.05 per unit of risk. If you would invest 1,574 in SentinelOne on September 2, 2024 and sell it today you would earn a total of 1,221 from holding SentinelOne or generate 77.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 84.68% |
| Values | Daily Returns |
SentinelOne vs. Aura FAT Projects
Performance |
| Timeline |
| SentinelOne |
| Aura FAT Projects |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SentinelOne and Aura FAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Aura FAT
The main advantage of trading using opposite SentinelOne and Aura FAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Aura FAT 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 Aura FAT will offset losses from the drop in Aura FAT's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Aura FAT vs. Embrace Change Acquisition | Aura FAT vs. Denali Capital Acquisition | Aura FAT vs. Aimfinity Investment I |
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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