Correlation Between SentinelOne and American Beacon
Can any of the company-specific risk be diversified away by investing in both SentinelOne and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and American Beacon Stephens, you can compare the effects of market volatilities on SentinelOne and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and American Beacon.
Diversification Opportunities for SentinelOne and American Beacon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Stephens has no effect on the direction of SentinelOne i.e., SentinelOne and American Beacon go up and down completely randomly.
Pair Corralation between SentinelOne and American Beacon
Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.03 times more return on investment than American Beacon. However, SentinelOne is 3.03 times more volatile than American Beacon Stephens. It trades about 0.06 of its potential returns per unit of risk. American Beacon Stephens is currently generating about 0.04 per unit of risk. If you would invest 1,425 in SentinelOne on August 26, 2024 and sell it today you would earn a total of 1,429 from holding SentinelOne or generate 100.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. American Beacon Stephens
Performance |
| Timeline |
| SentinelOne |
| American Beacon Stephens |
SentinelOne and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and American Beacon
The main advantage of trading using opposite SentinelOne and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Rapid7 Inc |
| American Beacon vs. Pioneer High Yield | American Beacon vs. Artisan High Income | American Beacon vs. Gmo High Yield | American Beacon vs. Multi Manager High Yield |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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