Correlation Between Corpay and SentinelOne

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

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

Diversification Opportunities for Corpay and SentinelOne

0.64

Correlation Coefficient

Corpay  SentinelOne

Poor diversification

The 3 months correlation between Corpay and SentinelOne is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Corpay Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Corpay 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 Corpay 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 Corpay i.e., Corpay and SentinelOne go up and down completely randomly.

Pair Corralation between Corpay and SentinelOne

Given the investment horizon of 90 days Corpay Inc is expected to generate 0.33 times more return on investment than SentinelOne. However, Corpay Inc is 3.02 times less risky than SentinelOne. It trades about -0.32 of its potential returns per unit of risk. SentinelOne is currently generating about -0.26 per unit of risk. If you would invest  37,546  in Corpay Inc on September 22, 2024 and sell it today you would lose (3,163) from holding Corpay Inc or give up 8.42% of portfolio value over 90 days.

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

Corpay Inc  vs.  SentinelOne

Corpay Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corpay Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Corpay may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SentinelOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Corpay and SentinelOne

The main advantage of trading using opposite Corpay and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corpay 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 Corpay 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.