Correlation Between SentinelOne and Small Cap
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Small Cap Value Fund, you can compare the effects of market volatilities on SentinelOne and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Small Cap.
Diversification Opportunities for SentinelOne and Small Cap
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Small is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Small Cap Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of SentinelOne i.e., SentinelOne and Small Cap go up and down completely randomly.
Pair Corralation between SentinelOne and Small Cap
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.15 times less return on investment than Small Cap. In addition to that, SentinelOne is 1.35 times more volatile than Small Cap Value Fund. It trades about 0.17 of its total potential returns per unit of risk. Small Cap Value Fund is currently generating about 0.26 per unit of volatility. If you would invest 3,969 in Small Cap Value Fund on September 1, 2024 and sell it today you would earn a total of 402.00 from holding Small Cap Value Fund or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Small Cap Value Fund
Performance |
| Timeline |
| SentinelOne |
| Small Cap Value |
SentinelOne and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Small Cap
The main advantage of trading using opposite SentinelOne and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Small Cap vs. Siit High Yield | Small Cap vs. Franklin High Income | Small Cap vs. T Rowe Price | Small Cap vs. Strategic Allocation Aggressive |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |