Correlation Between SentinelOne and UL Solutions
Can any of the company-specific risk be diversified away by investing in both SentinelOne and UL Solutions 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 UL Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and UL Solutions, you can compare the effects of market volatilities on SentinelOne and UL Solutions 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 UL Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and UL Solutions.
Diversification Opportunities for SentinelOne and UL Solutions
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SentinelOne and ULS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and UL Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UL Solutions 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 UL Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UL Solutions has no effect on the direction of SentinelOne i.e., SentinelOne and UL Solutions go up and down completely randomly.
Pair Corralation between SentinelOne and UL Solutions
Taking into account the 90-day investment horizon SentinelOne is expected to generate 4.54 times less return on investment than UL Solutions. In addition to that, SentinelOne is 1.17 times more volatile than UL Solutions. It trades about 0.03 of its total potential returns per unit of risk. UL Solutions is currently generating about 0.17 per unit of volatility. If you would invest 2,791 in UL Solutions on September 1, 2024 and sell it today you would earn a total of 2,582 from holding UL Solutions or generate 92.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.17% |
| Values | Daily Returns |
SentinelOne vs. UL Solutions
Performance |
| Timeline |
| SentinelOne |
| UL Solutions |
SentinelOne and UL Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and UL Solutions
The main advantage of trading using opposite SentinelOne and UL Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, UL Solutions 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 UL Solutions will offset losses from the drop in UL Solutions' long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| UL Solutions vs. FormFactor | UL Solutions vs. Taiwan Semiconductor Manufacturing | UL Solutions vs. Arm Holdings plc | UL Solutions vs. Townsquare Media |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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