Correlation Between SentinelOne and NETGEAR
Can any of the company-specific risk be diversified away by investing in both SentinelOne and NETGEAR 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 NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and NETGEAR, you can compare the effects of market volatilities on SentinelOne and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and NETGEAR.
Diversification Opportunities for SentinelOne and NETGEAR
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and NETGEAR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of SentinelOne i.e., SentinelOne and NETGEAR go up and down completely randomly.
Pair Corralation between SentinelOne and NETGEAR
Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.69 times less return on investment than NETGEAR. But when comparing it to its historical volatility, SentinelOne is 1.75 times less risky than NETGEAR. It trades about 0.08 of its potential returns per unit of risk. NETGEAR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,578 in NETGEAR on August 23, 2024 and sell it today you would earn a total of 813.00 from holding NETGEAR or generate 51.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. NETGEAR
Performance |
| Timeline |
| SentinelOne |
| NETGEAR |
SentinelOne and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and NETGEAR
The main advantage of trading using opposite SentinelOne and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |