Correlation Between SentinelOne and Systex Corp

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

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

Diversification Opportunities for SentinelOne and Systex Corp

-0.26

Correlation Coefficient

SentinelOne  Systex Corp

Very good diversification

The 3 months correlation between SentinelOne and Systex is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Systex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systex Corp 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 Systex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systex Corp has no effect on the direction of SentinelOne i.e., SentinelOne and Systex Corp go up and down completely randomly.

Pair Corralation between SentinelOne and Systex Corp

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.63 times more return on investment than Systex Corp. However, SentinelOne is 1.6 times less risky than Systex Corp. It trades about -0.02 of its potential returns per unit of risk. Systex Corp is currently generating about -0.19 per unit of risk. If you would invest  2,243  in SentinelOne on October 22, 2024 and sell it today you would lose (10.00) from holding SentinelOne or give up 0.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

SentinelOne  vs.  Systex Corp

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

Systex Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Systex Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Systex Corp 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 Systex Corp

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

The idea behind SentinelOne and Systex Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.