Correlation Between SentinelOne and Bayer AG

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and Bayer AG 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 Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Bayer AG PK, you can compare the effects of market volatilities on SentinelOne and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Bayer AG.

Diversification Opportunities for SentinelOne and Bayer AG

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between SentinelOne and Bayer is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Bayer AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG PK 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG PK has no effect on the direction of SentinelOne i.e., SentinelOne and Bayer AG go up and down completely randomly.

Pair Corralation between SentinelOne and Bayer AG

If you would invest  1,742  in SentinelOne on August 31, 2024 and sell it today you would earn a total of  1,066  from holding SentinelOne or generate 61.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy0.25%
ValuesDaily Returns

SentinelOne  vs.  Bayer AG PK

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.
Bayer AG PK 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bayer AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bayer AG is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SentinelOne and Bayer AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and Bayer AG

The main advantage of trading using opposite SentinelOne and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.
The idea behind SentinelOne and Bayer AG PK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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