Correlation Between SentinelOne and STM Group
Can any of the company-specific risk be diversified away by investing in both SentinelOne and STM Group 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 STM Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and STM Group Plc, you can compare the effects of market volatilities on SentinelOne and STM Group 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 STM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and STM Group.
Diversification Opportunities for SentinelOne and STM Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and STM is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and STM Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STM Group 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 STM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STM Group Plc has no effect on the direction of SentinelOne i.e., SentinelOne and STM Group go up and down completely randomly.
Pair Corralation between SentinelOne and STM Group
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.24 times more return on investment than STM Group. However, SentinelOne is 1.24 times more volatile than STM Group Plc. It trades about 0.19 of its potential returns per unit of risk. STM Group Plc is currently generating about 0.13 per unit of risk. If you would invest 2,597 in SentinelOne on August 25, 2024 and sell it today you would earn a total of 257.00 from holding SentinelOne or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.82% |
| Values | Daily Returns |
SentinelOne vs. STM Group Plc
Performance |
| Timeline |
| SentinelOne |
| STM Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SentinelOne and STM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and STM Group
The main advantage of trading using opposite SentinelOne and STM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, STM Group 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 STM Group will offset losses from the drop in STM Group's 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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