Correlation Between SentinelOne and NEXT Plc
Can any of the company-specific risk be diversified away by investing in both SentinelOne and NEXT Plc 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 NEXT Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and NEXT plc, you can compare the effects of market volatilities on SentinelOne and NEXT Plc 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 NEXT Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and NEXT Plc.
Diversification Opportunities for SentinelOne and NEXT Plc
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SentinelOne and NEXT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and NEXT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXT plc 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 NEXT Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXT plc has no effect on the direction of SentinelOne i.e., SentinelOne and NEXT Plc go up and down completely randomly.
Pair Corralation between SentinelOne and NEXT Plc
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.42 times more return on investment than NEXT Plc. However, SentinelOne is 1.42 times more volatile than NEXT plc. It trades about 0.16 of its potential returns per unit of risk. NEXT plc is currently generating about -0.03 per unit of risk. If you would invest 2,412 in SentinelOne on August 26, 2024 and sell it today you would earn a total of 442.00 from holding SentinelOne or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. NEXT plc
Performance |
| Timeline |
| SentinelOne |
| NEXT plc |
SentinelOne and NEXT Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and NEXT Plc
The main advantage of trading using opposite SentinelOne and NEXT Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, NEXT Plc 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 NEXT Plc will offset losses from the drop in NEXT Plc's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
| NEXT Plc vs. Strategic Education | NEXT Plc vs. American Public Education | NEXT Plc vs. Laureate Education | NEXT Plc vs. NetSol Technologies |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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