Correlation Between SentinelOne and Light Wonder
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Light Wonder 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 Light Wonder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Light Wonder, you can compare the effects of market volatilities on SentinelOne and Light Wonder 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 Light Wonder. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Light Wonder.
Diversification Opportunities for SentinelOne and Light Wonder
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SentinelOne and Light is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Light Wonder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Wonder 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 Light Wonder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Wonder has no effect on the direction of SentinelOne i.e., SentinelOne and Light Wonder go up and down completely randomly.
Pair Corralation between SentinelOne and Light Wonder
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.77 times more return on investment than Light Wonder. However, SentinelOne is 1.77 times more volatile than Light Wonder. It trades about 0.06 of its potential returns per unit of risk. Light Wonder is currently generating about 0.05 per unit of risk. If you would invest 1,410 in SentinelOne on August 27, 2024 and sell it today you would earn a total of 1,444 from holding SentinelOne or generate 102.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Light Wonder
Performance |
| Timeline |
| SentinelOne |
| Light Wonder |
SentinelOne and Light Wonder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Light Wonder
The main advantage of trading using opposite SentinelOne and Light Wonder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Light Wonder 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 Light Wonder will offset losses from the drop in Light Wonder's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Paysafe |
| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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