Correlation Between SentinelOne and Canadian Western
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Canadian Western 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 Canadian Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Canadian Western Bank, you can compare the effects of market volatilities on SentinelOne and Canadian Western 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 Canadian Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Canadian Western.
Diversification Opportunities for SentinelOne and Canadian Western
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Canadian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Canadian Western Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Western Bank 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 Canadian Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Western Bank has no effect on the direction of SentinelOne i.e., SentinelOne and Canadian Western go up and down completely randomly.
Pair Corralation between SentinelOne and Canadian Western
Taking into account the 90-day investment horizon SentinelOne is expected to generate 4.42 times more return on investment than Canadian Western. However, SentinelOne is 4.42 times more volatile than Canadian Western Bank. It trades about 0.13 of its potential returns per unit of risk. Canadian Western Bank is currently generating about 0.37 per unit of risk. If you would invest 2,609 in SentinelOne on August 28, 2024 and sell it today you would earn a total of 179.00 from holding SentinelOne or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Canadian Western Bank
Performance |
| Timeline |
| SentinelOne |
| Canadian Western Bank |
SentinelOne and Canadian Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Canadian Western
The main advantage of trading using opposite SentinelOne and Canadian Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Canadian Western 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 Canadian Western will offset losses from the drop in Canadian Western's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Paysafe |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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