Correlation Between SentinelOne and Global Payments

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Global Payments 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 Global Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Global Payments, you can compare the effects of market volatilities on SentinelOne and Global Payments 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 Global Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Global Payments.

Diversification Opportunities for SentinelOne and Global Payments

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between SentinelOne and Global is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments 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 Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of SentinelOne i.e., SentinelOne and Global Payments go up and down completely randomly.

Pair Corralation between SentinelOne and Global Payments

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.65 times more return on investment than Global Payments. However, SentinelOne is 1.65 times more volatile than Global Payments. It trades about 0.02 of its potential returns per unit of risk. Global Payments is currently generating about -0.02 per unit of risk. If you would invest  2,756  in SentinelOne on September 1, 2024 and sell it today you would earn a total of  39.00  from holding SentinelOne or generate 1.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SentinelOne  vs.  Global Payments

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.
Global Payments 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Global Payments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Global Payments may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SentinelOne and Global Payments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and Global Payments

The main advantage of trading using opposite SentinelOne and Global Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Global Payments 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 Global Payments will offset losses from the drop in Global Payments' long position.
The idea behind SentinelOne and Global Payments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Global Correlations
Find global opportunities by holding instruments from different markets
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators