Correlation Between SentinelOne and Innovator
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Innovator 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 Innovator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Innovator SP 500, you can compare the effects of market volatilities on SentinelOne and Innovator 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 Innovator. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Innovator.
Diversification Opportunities for SentinelOne and Innovator
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SentinelOne and Innovator is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Innovator SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator SP 500 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 Innovator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator SP 500 has no effect on the direction of SentinelOne i.e., SentinelOne and Innovator go up and down completely randomly.
Pair Corralation between SentinelOne and Innovator
Taking into account the 90-day investment horizon SentinelOne is expected to generate 9.54 times more return on investment than Innovator. However, SentinelOne is 9.54 times more volatile than Innovator SP 500. It trades about 0.17 of its potential returns per unit of risk. Innovator SP 500 is currently generating about 0.44 per unit of risk. If you would invest 2,579 in SentinelOne on September 1, 2024 and sell it today you would earn a total of 216.00 from holding SentinelOne or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SentinelOne vs. Innovator SP 500
Performance |
| Timeline |
| SentinelOne |
| Innovator SP 500 |
SentinelOne and Innovator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Innovator
The main advantage of trading using opposite SentinelOne and Innovator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Innovator 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 Innovator will offset losses from the drop in Innovator's long position.| SentinelOne vs. Palo Alto Networks | SentinelOne vs. Uipath Inc | SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated |
| Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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