Correlation Between SentinelOne and Direxion Shares
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Direxion Shares 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 Direxion Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Direxion Shares ETF, you can compare the effects of market volatilities on SentinelOne and Direxion Shares 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 Direxion Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Direxion Shares.
Diversification Opportunities for SentinelOne and Direxion Shares
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Direxion is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Direxion Shares ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Shares ETF 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 Direxion Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Shares ETF has no effect on the direction of SentinelOne i.e., SentinelOne and Direxion Shares go up and down completely randomly.
Pair Corralation between SentinelOne and Direxion Shares
Taking into account the 90-day investment horizon SentinelOne is expected to generate 8.49 times less return on investment than Direxion Shares. But when comparing it to its historical volatility, SentinelOne is 3.96 times less risky than Direxion Shares. It trades about 0.12 of its potential returns per unit of risk. Direxion Shares ETF is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Direxion Shares ETF on August 31, 2024 and sell it today you would earn a total of 730.00 from holding Direxion Shares ETF or generate 57.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Direxion Shares ETF
Performance |
| Timeline |
| SentinelOne |
| Direxion Shares ETF |
SentinelOne and Direxion Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Direxion Shares
The main advantage of trading using opposite SentinelOne and Direxion Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Direxion Shares 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 Direxion Shares will offset losses from the drop in Direxion Shares' long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |