Correlation Between Box and SentinelOne

Can any of the company-specific risk be diversified away by investing in both Box 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 Box and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Box Inc and SentinelOne, you can compare the effects of market volatilities on Box 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 Box with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and SentinelOne.

Diversification Opportunities for Box and SentinelOne

0.53

Correlation Coefficient

Box  SentinelOne

Very weak diversification

The 3 months correlation between Box and SentinelOne is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Box 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 Box 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 Box i.e., Box and SentinelOne go up and down completely randomly.

Pair Corralation between Box and SentinelOne

Considering the 90-day investment horizon Box Inc is expected to under-perform the SentinelOne. But the stock apears to be less risky and, when comparing its historical volatility, Box Inc is 2.04 times less risky than SentinelOne. The stock trades about -0.02 of its potential returns per unit of risk. The SentinelOne is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,268  in SentinelOne on September 13, 2024 and sell it today you would earn a total of  89.00  from holding SentinelOne or generate 3.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Box Inc  vs.  SentinelOne

Box Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Box Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SentinelOne

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SentinelOne may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Box and SentinelOne

The main advantage of trading using opposite Box and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box 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 Box 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.