Correlation Between Toast and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Toast and SentinelOne 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 Toast and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toast Inc and SentinelOne, you can compare the effects of market volatilities on Toast and SentinelOne 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 Toast with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toast and SentinelOne.
Diversification Opportunities for Toast and SentinelOne
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Toast and SentinelOne is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Toast Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Toast 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 Toast Inc are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Toast i.e., Toast and SentinelOne go up and down completely randomly.
Pair Corralation between Toast and SentinelOne
Given the investment horizon of 90 days Toast Inc is expected to generate 1.0 times more return on investment than SentinelOne. However, Toast is 1.0 times more volatile than SentinelOne. It trades about 0.07 of its potential returns per unit of risk. SentinelOne is currently generating about 0.07 per unit of risk. If you would invest 2,193 in Toast Inc on August 31, 2024 and sell it today you would earn a total of 2,161 from holding Toast Inc or generate 98.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toast Inc vs. SentinelOne
Performance |
| Timeline |
| Toast Inc |
| SentinelOne |
Toast and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toast and SentinelOne
The main advantage of trading using opposite Toast and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toast position performs unexpectedly, SentinelOne 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 SentinelOne will offset losses from the drop in SentinelOne's long position.The idea behind Toast Inc and SentinelOne pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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