Correlation Between SentinelOne and Techwing

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

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

Diversification Opportunities for SentinelOne and Techwing

0.43

Correlation Coefficient

SentinelOne  Techwing

Very weak diversification

The 3 months correlation between SentinelOne and Techwing is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Techwing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techwing 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 Techwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techwing has no effect on the direction of SentinelOne i.e., SentinelOne and Techwing go up and down completely randomly.

Pair Corralation between SentinelOne and Techwing

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Techwing. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.75 times less risky than Techwing. The stock trades about -0.08 of its potential returns per unit of risk. The Techwing is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,657,000  in Techwing on December 25, 2024 and sell it today you would earn a total of  223,000  from holding Techwing or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.92%
Values	Daily Returns

SentinelOne  vs.  Techwing

SentinelOne

Risk-Adjusted Performance

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 latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Techwing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Techwing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Techwing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SentinelOne and Techwing

The main advantage of trading using opposite SentinelOne and Techwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Techwing 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 Techwing will offset losses from the drop in Techwing's long position.

The idea behind SentinelOne and Techwing 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.