Correlation Between SentinelOne and New Stratus
Can any of the company-specific risk be diversified away by investing in both SentinelOne and New Stratus 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 Stratus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and New Stratus Energy, you can compare the effects of market volatilities on SentinelOne and New Stratus 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 Stratus. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and New Stratus.
Diversification Opportunities for SentinelOne and New Stratus
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and New is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and New Stratus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Stratus Energy 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 Stratus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Stratus Energy has no effect on the direction of SentinelOne i.e., SentinelOne and New Stratus go up and down completely randomly.
Pair Corralation between SentinelOne and New Stratus
Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.7 times more return on investment than New Stratus. However, SentinelOne is 1.43 times less risky than New Stratus. It trades about 0.08 of its potential returns per unit of risk. New Stratus Energy is currently generating about 0.03 per unit of risk. If you would invest 1,548 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 1,247 from holding SentinelOne or generate 80.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.26% |
| Values | Daily Returns |
SentinelOne vs. New Stratus Energy
Performance |
| Timeline |
| SentinelOne |
| New Stratus Energy |
SentinelOne and New Stratus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and New Stratus
The main advantage of trading using opposite SentinelOne and New Stratus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, New Stratus 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 Stratus will offset losses from the drop in New Stratus' long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| New Stratus vs. Arrow Exploration Corp | New Stratus vs. Southern Energy Corp | New Stratus vs. TAG Oil | New Stratus vs. Hemisphere Energy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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