Correlation Between SentinelOne and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both SentinelOne and The Arbitrage 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 The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and The Arbitrage Credit, you can compare the effects of market volatilities on SentinelOne and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and The Arbitrage.
Diversification Opportunities for SentinelOne and The Arbitrage
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and The is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit 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 The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of SentinelOne i.e., SentinelOne and The Arbitrage go up and down completely randomly.
Pair Corralation between SentinelOne and The Arbitrage
Taking into account the 90-day investment horizon SentinelOne is expected to generate 28.3 times more return on investment than The Arbitrage. However, SentinelOne is 28.3 times more volatile than The Arbitrage Credit. It trades about 0.08 of its potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.2 per unit of risk. If you would invest 1,548 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 1,247 from holding SentinelOne or generate 80.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. The Arbitrage Credit
Performance |
| Timeline |
| SentinelOne |
| Arbitrage Credit |
SentinelOne and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and The Arbitrage
The main advantage of trading using opposite SentinelOne and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Event Driven | The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Event Driven |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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