Correlation Between SentinelOne and Nine Energy
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Nine Energy 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 Nine Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Nine Energy Service, you can compare the effects of market volatilities on SentinelOne and Nine Energy 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 Nine Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Nine Energy.
Diversification Opportunities for SentinelOne and Nine Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SentinelOne and Nine is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Nine Energy Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Energy Service 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 Nine Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Energy Service has no effect on the direction of SentinelOne i.e., SentinelOne and Nine Energy go up and down completely randomly.
Pair Corralation between SentinelOne and Nine Energy
Taking into account the 90-day investment horizon SentinelOne is expected to generate 9.35 times less return on investment than Nine Energy. But when comparing it to its historical volatility, SentinelOne is 3.53 times less risky than Nine Energy. It trades about 0.12 of its potential returns per unit of risk. Nine Energy Service is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Nine Energy Service on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Nine Energy Service or generate 74.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SentinelOne vs. Nine Energy Service
Performance |
| Timeline |
| SentinelOne |
| Nine Energy Service |
SentinelOne and Nine Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Nine Energy
The main advantage of trading using opposite SentinelOne and Nine Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Nine Energy 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 Nine Energy will offset losses from the drop in Nine Energy's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Newpark Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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