Correlation Between SentinelOne and Alpha Technology
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Alpha Technology 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 Alpha Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Alpha Technology Group, you can compare the effects of market volatilities on SentinelOne and Alpha Technology 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 Alpha Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Alpha Technology.
Diversification Opportunities for SentinelOne and Alpha Technology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Alpha is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Alpha Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Technology 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 Alpha Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Technology has no effect on the direction of SentinelOne i.e., SentinelOne and Alpha Technology go up and down completely randomly.
Pair Corralation between SentinelOne and Alpha Technology
Taking into account the 90-day investment horizon SentinelOne is expected to generate 4.09 times less return on investment than Alpha Technology. But when comparing it to its historical volatility, SentinelOne is 4.56 times less risky than Alpha Technology. It trades about 0.18 of its potential returns per unit of risk. Alpha Technology Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,077 in Alpha Technology Group on August 27, 2024 and sell it today you would earn a total of 343.00 from holding Alpha Technology Group or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Alpha Technology Group
Performance |
| Timeline |
| SentinelOne |
| Alpha Technology |
SentinelOne and Alpha Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Alpha Technology
The main advantage of trading using opposite SentinelOne and Alpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Alpha Technology 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 Alpha Technology will offset losses from the drop in Alpha Technology's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
| Alpha Technology vs. Kite Realty Group | Alpha Technology vs. BBB Foods | Alpha Technology vs. Paiute Oil Mining | Alpha Technology vs. Inhibrx |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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