Correlation Between SentinelOne and Cofina SGPS

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

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

Diversification Opportunities for SentinelOne and Cofina SGPS

0.03

Correlation Coefficient

SentinelOne  Cofina SGPS

Significant diversification

The 3 months correlation between SentinelOne and Cofina is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Cofina SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofina SGPS SA 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 Cofina SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofina SGPS SA has no effect on the direction of SentinelOne i.e., SentinelOne and Cofina SGPS go up and down completely randomly.

Pair Corralation between SentinelOne and Cofina SGPS

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Cofina SGPS. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 10.32 times less risky than Cofina SGPS. The stock trades about -0.17 of its potential returns per unit of risk. The Cofina SGPS SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,300  in Cofina SGPS SA on October 8, 2024 and sell it today you would lose (460.00) from holding Cofina SGPS SA or give up 13.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.21%
Values	Daily Returns

SentinelOne  vs.  Cofina SGPS SA

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cofina SGPS SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cofina SGPS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cofina SGPS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Cofina SGPS

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

The idea behind SentinelOne and Cofina SGPS SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.