Correlation Between SentinelOne and Johnson Controls
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Johnson Controls 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 Johnson Controls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Johnson Controls International, you can compare the effects of market volatilities on SentinelOne and Johnson Controls 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 Johnson Controls. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Johnson Controls.
Diversification Opportunities for SentinelOne and Johnson Controls
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Johnson is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Johnson Controls International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Controls Int 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 Johnson Controls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Controls Int has no effect on the direction of SentinelOne i.e., SentinelOne and Johnson Controls go up and down completely randomly.
Pair Corralation between SentinelOne and Johnson Controls
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.33 times less return on investment than Johnson Controls. In addition to that, SentinelOne is 1.23 times more volatile than Johnson Controls International. It trades about 0.17 of its total potential returns per unit of risk. Johnson Controls International is currently generating about 0.27 per unit of volatility. If you would invest 6,969 in Johnson Controls International on September 1, 2024 and sell it today you would earn a total of 899.00 from holding Johnson Controls International or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
SentinelOne vs. Johnson Controls International
Performance |
| Timeline |
| SentinelOne |
| Johnson Controls Int |
SentinelOne and Johnson Controls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Johnson Controls
The main advantage of trading using opposite SentinelOne and Johnson Controls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Johnson Controls 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 Johnson Controls will offset losses from the drop in Johnson Controls' long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Johnson Controls vs. Larsen Toubro Limited | Johnson Controls vs. Superior Plus Corp | Johnson Controls vs. NMI Holdings | Johnson Controls vs. Origin Agritech |
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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