Correlation Between SentinelOne and Advanced Medical

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

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

Diversification Opportunities for SentinelOne and Advanced Medical

0.21

Correlation Coefficient

SentinelOne  Advanced Medical

Modest diversification

The 3 months correlation between SentinelOne and Advanced is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of SentinelOne i.e., SentinelOne and Advanced Medical go up and down completely randomly.

Pair Corralation between SentinelOne and Advanced Medical

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Advanced Medical. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.14 times less risky than Advanced Medical. The stock trades about -0.06 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Advanced Medical Solutions on October 23, 2024 and sell it today you would earn a total of  20.00  from holding Advanced Medical Solutions or generate 8.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

SentinelOne  vs.  Advanced Medical Solutions

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 latest unsteady 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.

Advanced Medical Sol

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Advanced Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SentinelOne and Advanced Medical

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

The idea behind SentinelOne and Advanced Medical Solutions 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.