Correlation Between SentinelOne and New Perspective
Can any of the company-specific risk be diversified away by investing in both SentinelOne and New Perspective 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 New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and New Perspective Fund, you can compare the effects of market volatilities on SentinelOne and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and New Perspective.
Diversification Opportunities for SentinelOne and New Perspective
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and New is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of SentinelOne i.e., SentinelOne and New Perspective go up and down completely randomly.
Pair Corralation between SentinelOne and New Perspective
Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.17 times more return on investment than New Perspective. However, SentinelOne is 3.17 times more volatile than New Perspective Fund. It trades about 0.16 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.07 per unit of risk. If you would invest 1,683 in SentinelOne on August 29, 2024 and sell it today you would earn a total of 1,125 from holding SentinelOne or generate 66.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. New Perspective Fund
Performance |
| Timeline |
| SentinelOne |
| New Perspective |
SentinelOne and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and New Perspective
The main advantage of trading using opposite SentinelOne and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| New Perspective vs. Davis Financial Fund | New Perspective vs. First Trust Specialty | New Perspective vs. Prudential Jennison Financial | New Perspective vs. T Rowe Price |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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