Correlation Between SentinelOne and China National

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

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

Diversification Opportunities for SentinelOne and China National

0.35

Correlation Coefficient

SentinelOne  China National

Weak diversification

The 3 months correlation between SentinelOne and China is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and China National Medicines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Medicines 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 China National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Medicines has no effect on the direction of SentinelOne i.e., SentinelOne and China National go up and down completely randomly.

Pair Corralation between SentinelOne and China National

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.67 times more return on investment than China National. However, SentinelOne is 1.67 times more volatile than China National Medicines. It trades about -0.11 of its potential returns per unit of risk. China National Medicines is currently generating about -0.18 per unit of risk. If you would invest  2,269  in SentinelOne on December 24, 2024 and sell it today you would lose (342.00) from holding SentinelOne or give up 15.07% of portfolio value over 90 days.

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

SentinelOne  vs.  China National Medicines

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

China National Medicines

Risk-Adjusted Performance

Very Weak

Over the last 90 days China National Medicines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SentinelOne and China National

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

The idea behind SentinelOne and China National Medicines 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.