Correlation Between SentinelOne and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Federated Hermes 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 Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Federated Hermes ETF, you can compare the effects of market volatilities on SentinelOne and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Federated Hermes.
Diversification Opportunities for SentinelOne and Federated Hermes
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Federated is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Federated Hermes ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes ETF 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes ETF has no effect on the direction of SentinelOne i.e., SentinelOne and Federated Hermes go up and down completely randomly.
Pair Corralation between SentinelOne and Federated Hermes
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.6 times more return on investment than Federated Hermes. However, SentinelOne is 1.6 times more volatile than Federated Hermes ETF. It trades about 0.17 of its potential returns per unit of risk. Federated Hermes ETF is currently generating about 0.27 per unit of risk. If you would invest 2,579 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 216.00 from holding SentinelOne or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SentinelOne vs. Federated Hermes ETF
Performance |
| Timeline |
| SentinelOne |
| Federated Hermes ETF |
SentinelOne and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Federated Hermes
The main advantage of trading using opposite SentinelOne and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Federated Hermes vs. Schwab Fundamental Large | Federated Hermes vs. Schwab Fundamental International | Federated Hermes vs. Schwab Fundamental International | Federated Hermes vs. Schwab Fundamental Emerging |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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