Correlation Between SentinelOne and Needham Small
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Needham Small 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 Needham Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Needham Small Cap, you can compare the effects of market volatilities on SentinelOne and Needham Small 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 Needham Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Needham Small.
Diversification Opportunities for SentinelOne and Needham Small
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Needham is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Needham Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Small Cap 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 Needham Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Small Cap has no effect on the direction of SentinelOne i.e., SentinelOne and Needham Small go up and down completely randomly.
Pair Corralation between SentinelOne and Needham Small
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.51 times more return on investment than Needham Small. However, SentinelOne is 1.51 times more volatile than Needham Small Cap. It trades about 0.17 of its potential returns per unit of risk. Needham Small Cap is currently generating about 0.23 per unit of risk. If you would invest 2,579 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 216.00 from holding SentinelOne or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SentinelOne vs. Needham Small Cap
Performance |
| Timeline |
| SentinelOne |
| Needham Small Cap |
SentinelOne and Needham Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Needham Small
The main advantage of trading using opposite SentinelOne and Needham Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Needham Small 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 Needham Small will offset losses from the drop in Needham Small's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Needham Small vs. Needham Aggressive Growth | Needham Small vs. Needham Growth Fund | Needham Small vs. Baron Opportunity Fund | Needham Small vs. Jacob Micro Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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