Correlation Between SentinelOne and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Spotify Technology 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 Spotify Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Spotify Technology SA, you can compare the effects of market volatilities on SentinelOne and Spotify Technology 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 Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Spotify Technology.
Diversification Opportunities for SentinelOne and Spotify Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Spotify is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology 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 Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of SentinelOne i.e., SentinelOne and Spotify Technology go up and down completely randomly.
Pair Corralation between SentinelOne and Spotify Technology
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.95 times less return on investment than Spotify Technology. In addition to that, SentinelOne is 1.44 times more volatile than Spotify Technology SA. It trades about 0.05 of its total potential returns per unit of risk. Spotify Technology SA is currently generating about 0.15 per unit of volatility. If you would invest 17,960 in Spotify Technology SA on August 31, 2024 and sell it today you would earn a total of 53,262 from holding Spotify Technology SA or generate 296.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
SentinelOne vs. Spotify Technology SA
Performance |
| Timeline |
| SentinelOne |
| Spotify Technology |
SentinelOne and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Spotify Technology
The main advantage of trading using opposite SentinelOne and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Spotify Technology vs. Alphabet | Spotify Technology vs. Meta Platforms | Spotify Technology vs. Baidu Inc | Spotify Technology vs. Autohome |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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