Correlation Between SentinelOne and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both SentinelOne and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on SentinelOne and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and ESSILORLUXOTTICA.
Diversification Opportunities for SentinelOne and ESSILORLUXOTTICA
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and ESSILORLUXOTTICA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSILORLUXOTTICA 12ON has no effect on the direction of SentinelOne i.e., SentinelOne and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between SentinelOne and ESSILORLUXOTTICA
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.96 times more return on investment than ESSILORLUXOTTICA. However, SentinelOne is 1.96 times more volatile than ESSILORLUXOTTICA 12ON. It trades about 0.16 of its potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.06 per unit of risk. If you would invest 1,722 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 1,073 from holding SentinelOne or generate 62.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.18% |
| Values | Daily Returns |
SentinelOne vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| SentinelOne |
| ESSILORLUXOTTICA 12ON |
SentinelOne and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and ESSILORLUXOTTICA
The main advantage of trading using opposite SentinelOne and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, ESSILORLUXOTTICA 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 ESSILORLUXOTTICA will offset losses from the drop in ESSILORLUXOTTICA's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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