Correlation Between SentinelOne and Connection Technology

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

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

Diversification Opportunities for SentinelOne and Connection Technology

-0.19

Correlation Coefficient

SentinelOne  Connection Technology

Good diversification

The 3 months correlation between SentinelOne and Connection is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Connection Technology Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connection Technology 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 Connection Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connection Technology has no effect on the direction of SentinelOne i.e., SentinelOne and Connection Technology go up and down completely randomly.

Pair Corralation between SentinelOne and Connection Technology

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Connection Technology. In addition to that, SentinelOne is 1.43 times more volatile than Connection Technology Systems. It trades about -0.08 of its total potential returns per unit of risk. Connection Technology Systems is currently generating about 0.0 per unit of volatility. If you would invest  2,010  in Connection Technology Systems on December 25, 2024 and sell it today you would lose (10.00) from holding Connection Technology Systems or give up 0.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

SentinelOne  vs.  Connection Technology Systems

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.

Connection Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Connection Technology Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Connection Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SentinelOne and Connection Technology

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

The idea behind SentinelOne and Connection Technology Systems 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.