Correlation Between SentinelOne and GM
Can any of the company-specific risk be diversified away by investing in both SentinelOne and GM 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 GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and General Motors, you can compare the effects of market volatilities on SentinelOne and GM 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 GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and GM.
Diversification Opportunities for SentinelOne and GM
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and GM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors 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 GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of SentinelOne i.e., SentinelOne and GM go up and down completely randomly.
Pair Corralation between SentinelOne and GM
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.21 times less return on investment than GM. But when comparing it to its historical volatility, SentinelOne is 1.17 times less risky than GM. It trades about 0.13 of its potential returns per unit of risk. General Motors is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 105,350 in General Motors on August 29, 2024 and sell it today you would earn a total of 8,472 from holding General Motors or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SentinelOne vs. General Motors
Performance |
| Timeline |
| SentinelOne |
| General Motors |
SentinelOne and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and GM
The main advantage of trading using opposite SentinelOne and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, GM 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 GM will offset losses from the drop in GM'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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