Correlation Between SentinelOne and DS Smith
Can any of the company-specific risk be diversified away by investing in both SentinelOne and DS Smith 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 DS Smith into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and DS Smith PLC, you can compare the effects of market volatilities on SentinelOne and DS Smith 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 DS Smith. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and DS Smith.
Diversification Opportunities for SentinelOne and DS Smith
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and SMDS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and DS Smith PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DS Smith PLC 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 DS Smith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DS Smith PLC has no effect on the direction of SentinelOne i.e., SentinelOne and DS Smith go up and down completely randomly.
Pair Corralation between SentinelOne and DS Smith
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.59 times less return on investment than DS Smith. But when comparing it to its historical volatility, SentinelOne is 1.32 times less risky than DS Smith. It trades about 0.17 of its potential returns per unit of risk. DS Smith PLC is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 47,560 in DS Smith PLC on August 26, 2024 and sell it today you would earn a total of 11,790 from holding DS Smith PLC or generate 24.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. DS Smith PLC
Performance |
| Timeline |
| SentinelOne |
| DS Smith PLC |
SentinelOne and DS Smith Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and DS Smith
The main advantage of trading using opposite SentinelOne and DS Smith positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, DS Smith 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 DS Smith will offset losses from the drop in DS Smith's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
| DS Smith vs. EVS Broadcast Equipment | DS Smith vs. Cairo Communication SpA | DS Smith vs. Orient Telecoms | DS Smith vs. Aeorema Communications Plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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