Correlation Between SentinelOne and First Trust
Can any of the company-specific risk be diversified away by investing in both SentinelOne and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and First Trust NASDAQ, you can compare the effects of market volatilities on SentinelOne and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and First Trust.
Diversification Opportunities for SentinelOne and First Trust
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SentinelOne and First is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and First Trust NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NASDAQ 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust NASDAQ has no effect on the direction of SentinelOne i.e., SentinelOne and First Trust go up and down completely randomly.
Pair Corralation between SentinelOne and First Trust
Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.43 times more return on investment than First Trust. However, SentinelOne is 3.43 times more volatile than First Trust NASDAQ. It trades about 0.14 of its potential returns per unit of risk. First Trust NASDAQ is currently generating about -0.12 per unit of risk. If you would invest 2,609 in SentinelOne on August 29, 2024 and sell it today you would earn a total of 199.00 from holding SentinelOne or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. First Trust NASDAQ
Performance |
| Timeline |
| SentinelOne |
| First Trust NASDAQ |
SentinelOne and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and First Trust
The main advantage of trading using opposite SentinelOne and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| First Trust vs. Global X Internet | First Trust vs. Pacer Benchmark Data | First Trust vs. SPDR SP Telecom | First Trust vs. Global X FinTech |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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