Correlation Between SentinelOne and RPM International
Can any of the company-specific risk be diversified away by investing in both SentinelOne and RPM International 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 RPM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and RPM International, you can compare the effects of market volatilities on SentinelOne and RPM International 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 RPM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and RPM International.
Diversification Opportunities for SentinelOne and RPM International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and RPM is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and RPM International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPM International 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 RPM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPM International has no effect on the direction of SentinelOne i.e., SentinelOne and RPM International go up and down completely randomly.
Pair Corralation between SentinelOne and RPM International
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.12 times less return on investment than RPM International. In addition to that, SentinelOne is 2.06 times more volatile than RPM International. It trades about 0.13 of its total potential returns per unit of risk. RPM International is currently generating about 0.31 per unit of volatility. If you would invest 12,945 in RPM International on August 27, 2024 and sell it today you would earn a total of 1,081 from holding RPM International or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. RPM International
Performance |
| Timeline |
| SentinelOne |
| RPM International |
SentinelOne and RPM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and RPM International
The main advantage of trading using opposite SentinelOne and RPM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, RPM International 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 RPM International will offset losses from the drop in RPM International's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Paysafe |
| RPM International vs. Oil Dri | RPM International vs. H B Fuller | RPM International vs. Northern Technologies | RPM International vs. Cabot |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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