Correlation Between SentinelOne and Franklin Income
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Franklin Income 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 Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Franklin Income Equity, you can compare the effects of market volatilities on SentinelOne and Franklin Income 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 Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Franklin Income.
Diversification Opportunities for SentinelOne and Franklin Income
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Franklin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Franklin Income Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income Equity 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 Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income Equity has no effect on the direction of SentinelOne i.e., SentinelOne and Franklin Income go up and down completely randomly.
Pair Corralation between SentinelOne and Franklin Income
Taking into account the 90-day investment horizon SentinelOne is expected to generate 5.1 times more return on investment than Franklin Income. However, SentinelOne is 5.1 times more volatile than Franklin Income Equity. It trades about 0.17 of its potential returns per unit of risk. Franklin Income Equity is currently generating about 0.29 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Franklin Income Equity
Performance |
| Timeline |
| SentinelOne |
| Franklin Income Equity |
SentinelOne and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Franklin Income
The main advantage of trading using opposite SentinelOne and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Franklin Income 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 Franklin Income will offset losses from the drop in Franklin Income's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Franklin Income vs. Vanguard Total Stock | Franklin Income vs. SPDR SP 500 | Franklin Income vs. iShares Core SP | Franklin Income vs. Vanguard Dividend Appreciation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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