Correlation Between SentinelOne and Select Sector
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Select Sector 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 Select Sector into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and The Select Sector, you can compare the effects of market volatilities on SentinelOne and Select Sector 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 Select Sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Select Sector.
Diversification Opportunities for SentinelOne and Select Sector
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SentinelOne and Select is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and The Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Sector 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 Select Sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Sector has no effect on the direction of SentinelOne i.e., SentinelOne and Select Sector go up and down completely randomly.
Pair Corralation between SentinelOne and Select Sector
Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Select Sector. In addition to that, SentinelOne is 3.45 times more volatile than The Select Sector. It trades about -0.18 of its total potential returns per unit of risk. The Select Sector is currently generating about -0.25 per unit of volatility. If you would invest 286,500 in The Select Sector on November 28, 2024 and sell it today you would lose (11,000) from holding The Select Sector or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. The Select Sector
Performance |
| Timeline |
| SentinelOne |
| Select Sector |
SentinelOne and Select Sector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Select Sector
The main advantage of trading using opposite SentinelOne and Select Sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Select Sector 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 Select Sector will offset losses from the drop in Select Sector's long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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