Correlation Between SentinelOne and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both SentinelOne and IPG Photonics 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 IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and IPG Photonics, you can compare the effects of market volatilities on SentinelOne and IPG Photonics 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 IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and IPG Photonics.
Diversification Opportunities for SentinelOne and IPG Photonics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and IPG is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics 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 IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of SentinelOne i.e., SentinelOne and IPG Photonics go up and down completely randomly.
Pair Corralation between SentinelOne and IPG Photonics
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.49 times more return on investment than IPG Photonics. However, SentinelOne is 1.49 times more volatile than IPG Photonics. It trades about 0.05 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.02 per unit of risk. If you would invest 1,682 in SentinelOne on September 12, 2024 and sell it today you would earn a total of 679.00 from holding SentinelOne or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. IPG Photonics
Performance |
| Timeline |
| SentinelOne |
| IPG Photonics |
SentinelOne and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and IPG Photonics
The main advantage of trading using opposite SentinelOne and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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