Correlation Between SentinelOne and Large Cap
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Large Cap 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 Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Large Cap Value, you can compare the effects of market volatilities on SentinelOne and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Large Cap.
Diversification Opportunities for SentinelOne and Large Cap
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Large is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of SentinelOne i.e., SentinelOne and Large Cap go up and down completely randomly.
Pair Corralation between SentinelOne and Large Cap
Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.12 times more return on investment than Large Cap. However, SentinelOne is 3.12 times more volatile than Large Cap Value. It trades about 0.1 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.12 per unit of risk. If you would invest 2,426 in SentinelOne on August 29, 2024 and sell it today you would earn a total of 367.00 from holding SentinelOne or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Large Cap Value
Performance |
| Timeline |
| SentinelOne |
| Large Cap Value |
SentinelOne and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Large Cap
The main advantage of trading using opposite SentinelOne and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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