Correlation Between SentinelOne and Leef Brands
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Leef Brands 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 Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Leef Brands, you can compare the effects of market volatilities on SentinelOne and Leef Brands 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 Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Leef Brands.
Diversification Opportunities for SentinelOne and Leef Brands
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SentinelOne and Leef is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands 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 Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of SentinelOne i.e., SentinelOne and Leef Brands go up and down completely randomly.
Pair Corralation between SentinelOne and Leef Brands
Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Leef Brands. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 2.32 times less risky than Leef Brands. The stock trades about -0.1 of its potential returns per unit of risk. The Leef Brands is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Leef Brands on September 18, 2024 and sell it today you would earn a total of 3.00 from holding Leef Brands or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SentinelOne vs. Leef Brands
Performance |
| Timeline |
| SentinelOne |
| Leef Brands |
SentinelOne and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Leef Brands
The main advantage of trading using opposite SentinelOne and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' long position.| SentinelOne vs. Global Blue Group | SentinelOne vs. Aurora Mobile | SentinelOne vs. Marqeta | SentinelOne vs. Nextnav Acquisition Corp |
| Leef Brands vs. Copa Holdings SA | Leef Brands vs. United Airlines Holdings | Leef Brands vs. Delta Air Lines | Leef Brands vs. SkyWest |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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