Correlation Between SentinelOne and Myers Industries

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and Myers Industries 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 Myers Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Myers Industries, you can compare the effects of market volatilities on SentinelOne and Myers Industries 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 Myers Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Myers Industries.

Diversification Opportunities for SentinelOne and Myers Industries

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SentinelOne and Myers is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of SentinelOne i.e., SentinelOne and Myers Industries go up and down completely randomly.

Pair Corralation between SentinelOne and Myers Industries

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.84 times more return on investment than Myers Industries. However, SentinelOne is 1.2 times less risky than Myers Industries. It trades about 0.12 of its potential returns per unit of risk. Myers Industries is currently generating about -0.06 per unit of risk. If you would invest  2,647  in SentinelOne on August 31, 2024 and sell it today you would earn a total of  161.00  from holding SentinelOne or generate 6.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SentinelOne  vs.  Myers Industries

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.
Myers Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SentinelOne and Myers Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and Myers Industries

The main advantage of trading using opposite SentinelOne and Myers Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Myers Industries 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 Myers Industries will offset losses from the drop in Myers Industries' long position.
The idea behind SentinelOne and Myers Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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