Correlation Between SentinelOne and CAFCA

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

Diversification Opportunities for SentinelOne and CAFCA

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between SentinelOne and CAFCA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and CAFCA LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAFCA LIMITED 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 CAFCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAFCA LIMITED has no effect on the direction of SentinelOne i.e., SentinelOne and CAFCA go up and down completely randomly.

Pair Corralation between SentinelOne and CAFCA

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.94 times more return on investment than CAFCA. However, SentinelOne is 1.06 times less risky than CAFCA. It trades about -0.18 of its potential returns per unit of risk. CAFCA LIMITED is currently generating about -0.21 per unit of risk. If you would invest  2,327  in SentinelOne on November 28, 2024 and sell it today you would lose (219.00) from holding SentinelOne or give up 9.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SentinelOne  vs.  CAFCA LIMITED

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
CAFCA LIMITED 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CAFCA LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SentinelOne and CAFCA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and CAFCA

The main advantage of trading using opposite SentinelOne and CAFCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, CAFCA 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 CAFCA will offset losses from the drop in CAFCA's long position.
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The idea behind SentinelOne and CAFCA LIMITED 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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