Correlation Between SentinelOne and CMC Metals
Can any of the company-specific risk be diversified away by investing in both SentinelOne and CMC Metals 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 CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and CMC Metals, you can compare the effects of market volatilities on SentinelOne and CMC Metals 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 CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and CMC Metals.
Diversification Opportunities for SentinelOne and CMC Metals
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SentinelOne and CMC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals 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 CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of SentinelOne i.e., SentinelOne and CMC Metals go up and down completely randomly.
Pair Corralation between SentinelOne and CMC Metals
Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the CMC Metals. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 7.12 times less risky than CMC Metals. The stock trades about -0.11 of its potential returns per unit of risk. The CMC Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.40 in CMC Metals on November 28, 2024 and sell it today you would earn a total of 0.10 from holding CMC Metals or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
SentinelOne vs. CMC Metals
Performance |
| Timeline |
| SentinelOne |
| CMC Metals |
SentinelOne and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and CMC Metals
The main advantage of trading using opposite SentinelOne and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, CMC Metals 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Outcrop Gold Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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