Correlation Between SentinelOne and Arqit Quantum

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

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

Diversification Opportunities for SentinelOne and Arqit Quantum

-0.24

Correlation Coefficient

SentinelOne  Arqit Quantum

Very good diversification

The 3 months correlation between SentinelOne and Arqit is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Arqit Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arqit Quantum 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 Arqit Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arqit Quantum has no effect on the direction of SentinelOne i.e., SentinelOne and Arqit Quantum go up and down completely randomly.

Pair Corralation between SentinelOne and Arqit Quantum

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Arqit Quantum. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 4.53 times less risky than Arqit Quantum. The stock trades about -0.15 of its potential returns per unit of risk. The Arqit Quantum is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,162  in Arqit Quantum on December 2, 2024 and sell it today you would lose (891.00) from holding Arqit Quantum or give up 41.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SentinelOne  vs.  Arqit Quantum

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 abnormal 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.

Arqit Quantum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arqit Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with SentinelOne and Arqit Quantum

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

The idea behind SentinelOne and Arqit Quantum 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.