Correlation Between SentinelOne and Westport Fuel
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Westport Fuel 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 Westport Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Westport Fuel Systems, you can compare the effects of market volatilities on SentinelOne and Westport Fuel 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 Westport Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Westport Fuel.
Diversification Opportunities for SentinelOne and Westport Fuel
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SentinelOne and Westport is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Westport Fuel Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westport Fuel Systems 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 Westport Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westport Fuel Systems has no effect on the direction of SentinelOne i.e., SentinelOne and Westport Fuel go up and down completely randomly.
Pair Corralation between SentinelOne and Westport Fuel
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.41 times less return on investment than Westport Fuel. In addition to that, SentinelOne is 1.23 times more volatile than Westport Fuel Systems. It trades about 0.12 of its total potential returns per unit of risk. Westport Fuel Systems is currently generating about 0.21 per unit of volatility. If you would invest 412.00 in Westport Fuel Systems on August 31, 2024 and sell it today you would earn a total of 38.00 from holding Westport Fuel Systems or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Westport Fuel Systems
Performance |
| Timeline |
| SentinelOne |
| Westport Fuel Systems |
SentinelOne and Westport Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Westport Fuel
The main advantage of trading using opposite SentinelOne and Westport Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Westport Fuel 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 Westport Fuel will offset losses from the drop in Westport Fuel's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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