Correlation Between SentinelOne and Blackline

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

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

Diversification Opportunities for SentinelOne and Blackline

-0.03

Correlation Coefficient

SentinelOne  Blackline

Good diversification

The 3 months correlation between SentinelOne and Blackline is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline 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 Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of SentinelOne i.e., SentinelOne and Blackline go up and down completely randomly.

Pair Corralation between SentinelOne and Blackline

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.54 times more return on investment than Blackline. However, SentinelOne is 1.54 times more volatile than Blackline. It trades about 0.04 of its potential returns per unit of risk. Blackline is currently generating about 0.0 per unit of risk. If you would invest  1,509  in SentinelOne on October 22, 2024 and sell it today you would earn a total of  724.00  from holding SentinelOne or generate 47.98% return on investment over 90 days.

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

SentinelOne  vs.  Blackline

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.

Blackline

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Blackline is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SentinelOne and Blackline

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

The idea behind SentinelOne and Blackline 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.