Correlation Between SentinelOne and London Security
Can any of the company-specific risk be diversified away by investing in both SentinelOne and London Security 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 London Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and London Security Plc, you can compare the effects of market volatilities on SentinelOne and London Security 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 London Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and London Security.
Diversification Opportunities for SentinelOne and London Security
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SentinelOne and London is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and London Security Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Security Plc 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 London Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Security Plc has no effect on the direction of SentinelOne i.e., SentinelOne and London Security go up and down completely randomly.
Pair Corralation between SentinelOne and London Security
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.04 times more return on investment than London Security. However, SentinelOne is 2.04 times more volatile than London Security Plc. It trades about 0.16 of its potential returns per unit of risk. London Security Plc is currently generating about 0.06 per unit of risk. If you would invest 1,722 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 1,073 from holding SentinelOne or generate 62.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
SentinelOne vs. London Security Plc
Performance |
| Timeline |
| SentinelOne |
| London Security Plc |
SentinelOne and London Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and London Security
The main advantage of trading using opposite SentinelOne and London Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, London Security 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 London Security will offset losses from the drop in London Security's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| London Security vs. Samsung Electronics Co | London Security vs. Samsung Electronics Co | London Security vs. Hyundai Motor | London Security vs. Toyota Motor Corp |
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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