Correlation Between SentinelOne and Guangdong Taienkang

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

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

Diversification Opportunities for SentinelOne and Guangdong Taienkang

-0.77

Correlation Coefficient

SentinelOne  Guangdong Taienkang

Pay attention - limited upside

The 3 months correlation between SentinelOne and Guangdong is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Guangdong Taienkang Pharmaceut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Taienkang 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 Guangdong Taienkang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Taienkang has no effect on the direction of SentinelOne i.e., SentinelOne and Guangdong Taienkang go up and down completely randomly.

Pair Corralation between SentinelOne and Guangdong Taienkang

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Guangdong Taienkang. In addition to that, SentinelOne is 1.04 times more volatile than Guangdong Taienkang Pharmaceutical. It trades about -0.07 of its total potential returns per unit of risk. Guangdong Taienkang Pharmaceutical is currently generating about 0.21 per unit of volatility. If you would invest  1,500  in Guangdong Taienkang Pharmaceutical on December 25, 2024 and sell it today you would earn a total of  459.00  from holding Guangdong Taienkang Pharmaceutical or generate 30.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

SentinelOne  vs.  Guangdong Taienkang Pharmaceut

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.

Guangdong Taienkang

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Taienkang Pharmaceutical are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangdong Taienkang sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Guangdong Taienkang

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

The idea behind SentinelOne and Guangdong Taienkang Pharmaceutical 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.