Correlation Between SentinelOne and United Utilities
Can any of the company-specific risk be diversified away by investing in both SentinelOne and United Utilities 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 United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and United Utilities Group, you can compare the effects of market volatilities on SentinelOne and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and United Utilities.
Diversification Opportunities for SentinelOne and United Utilities
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SentinelOne and United is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of SentinelOne i.e., SentinelOne and United Utilities go up and down completely randomly.
Pair Corralation between SentinelOne and United Utilities
Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.22 times more return on investment than United Utilities. However, SentinelOne is 2.22 times more volatile than United Utilities Group. It trades about 0.06 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.03 per unit of risk. If you would invest 1,328 in SentinelOne on August 28, 2024 and sell it today you would earn a total of 1,460 from holding SentinelOne or generate 109.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.55% |
| Values | Daily Returns |
SentinelOne vs. United Utilities Group
Performance |
| Timeline |
| SentinelOne |
| United Utilities |
SentinelOne and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and United Utilities
The main advantage of trading using opposite SentinelOne and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| SentinelOne vs. GigaCloud Technology Class | SentinelOne vs. Arqit Quantum | SentinelOne vs. Cemtrex | SentinelOne vs. Paysafe |
| United Utilities vs. Summit Hotel Properties | United Utilities vs. BANKINTER ADR 2007 | United Utilities vs. InterContinental Hotels Group | United Utilities vs. National Bank Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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