Correlation Between SentinelOne and Baru Gold

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

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

Diversification Opportunities for SentinelOne and Baru Gold

-0.4

Correlation Coefficient

SentinelOne  Baru Gold

Very good diversification

The 3 months correlation between SentinelOne and Baru is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Baru Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baru Gold 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 Baru Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baru Gold Corp has no effect on the direction of SentinelOne i.e., SentinelOne and Baru Gold go up and down completely randomly.

Pair Corralation between SentinelOne and Baru Gold

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.31 times more return on investment than Baru Gold. However, SentinelOne is 3.18 times less risky than Baru Gold. It trades about -0.16 of its potential returns per unit of risk. Baru Gold Corp is currently generating about -0.22 per unit of risk. If you would invest  2,467  in SentinelOne on October 8, 2024 and sell it today you would lose (186.00) from holding SentinelOne or give up 7.54% of portfolio value over 90 days.

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

SentinelOne  vs.  Baru Gold 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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Baru Gold Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baru Gold Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Baru Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Baru Gold

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

The idea behind SentinelOne and Baru Gold 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.