Correlation Between SentinelOne and Capital One
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Capital One 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 Capital One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Capital One Financial, you can compare the effects of market volatilities on SentinelOne and Capital One 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 Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Capital One.
Diversification Opportunities for SentinelOne and Capital One
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Capital is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial 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 Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of SentinelOne i.e., SentinelOne and Capital One go up and down completely randomly.
Pair Corralation between SentinelOne and Capital One
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.69 times more return on investment than Capital One. However, SentinelOne is 1.69 times more volatile than Capital One Financial. It trades about 0.07 of its potential returns per unit of risk. Capital One Financial is currently generating about 0.11 per unit of risk. If you would invest 1,492 in SentinelOne on August 31, 2024 and sell it today you would earn a total of 1,303 from holding SentinelOne or generate 87.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Capital One Financial
Performance |
| Timeline |
| SentinelOne |
| Capital One Financial |
SentinelOne and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Capital One
The main advantage of trading using opposite SentinelOne and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Capital One vs. Applied Materials | Capital One vs. FibraHotel | Capital One vs. Grupo Carso SAB | Capital One vs. Verizon Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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