Correlation Between SentinelOne and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both SentinelOne and PayPal Holdings 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 PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and PayPal Holdings, you can compare the effects of market volatilities on SentinelOne and PayPal Holdings 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 PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and PayPal Holdings.
Diversification Opportunities for SentinelOne and PayPal Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and PayPal is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings 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 PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and PayPal Holdings go up and down completely randomly.
Pair Corralation between SentinelOne and PayPal Holdings
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.59 times less return on investment than PayPal Holdings. In addition to that, SentinelOne is 1.53 times more volatile than PayPal Holdings. It trades about 0.12 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.29 per unit of volatility. If you would invest 7,822 in PayPal Holdings on August 31, 2024 and sell it today you would earn a total of 835.00 from holding PayPal Holdings or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. PayPal Holdings
Performance |
| Timeline |
| SentinelOne |
| PayPal Holdings |
SentinelOne and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and PayPal Holdings
The main advantage of trading using opposite SentinelOne and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, PayPal Holdings 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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