Correlation Between SentinelOne and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Raytheon Technologies 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 Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Raytheon Technologies, you can compare the effects of market volatilities on SentinelOne and Raytheon Technologies 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 Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Raytheon Technologies.
Diversification Opportunities for SentinelOne and Raytheon Technologies
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SentinelOne and Raytheon is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Raytheon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies 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 Raytheon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytheon Technologies has no effect on the direction of SentinelOne i.e., SentinelOne and Raytheon Technologies go up and down completely randomly.
Pair Corralation between SentinelOne and Raytheon Technologies
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.73 times more return on investment than Raytheon Technologies. However, SentinelOne is 1.73 times more volatile than Raytheon Technologies. It trades about 0.16 of its potential returns per unit of risk. Raytheon Technologies is currently generating about 0.11 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 Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SentinelOne vs. Raytheon Technologies
Performance |
| Timeline |
| SentinelOne |
| Raytheon Technologies |
SentinelOne and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Raytheon Technologies
The main advantage of trading using opposite SentinelOne and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Raytheon Technologies 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 Raytheon Technologies will offset losses from the drop in Raytheon Technologies' long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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