Correlation Between SentinelOne and China Building

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

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

Diversification Opportunities for SentinelOne and China Building

0.0

Correlation Coefficient

SentinelOne  China Building

Pay attention - limited upside

The 3 months correlation between SentinelOne and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material 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 Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of SentinelOne i.e., SentinelOne and China Building go up and down completely randomly.

Pair Corralation between SentinelOne and China Building

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the China Building. In addition to that, SentinelOne is 1.45 times more volatile than China Building Material. It trades about -0.11 of its total potential returns per unit of risk. China Building Material is currently generating about -0.07 per unit of volatility. If you would invest  771.00  in China Building Material on December 24, 2024 and sell it today you would lose (56.00) from holding China Building Material or give up 7.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

SentinelOne  vs.  China Building Material

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 Building Material

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Building Material has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SentinelOne and China Building

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

The idea behind SentinelOne and China Building Material 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.