Correlation Between SentinelOne and Box

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

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

Diversification Opportunities for SentinelOne and Box

0.61

Correlation Coefficient

SentinelOne  Box

Poor diversification

The 3 months correlation between SentinelOne and Box is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc 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 Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Box Inc has no effect on the direction of SentinelOne i.e., SentinelOne and Box go up and down completely randomly.

Pair Corralation between SentinelOne and Box

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Box. In addition to that, SentinelOne is 1.78 times more volatile than Box Inc. It trades about -0.08 of its total potential returns per unit of risk. Box Inc is currently generating about -0.05 per unit of volatility. If you would invest  3,216  in Box Inc on December 25, 2024 and sell it today you would lose (135.00) from holding Box Inc or give up 4.2% of portfolio value over 90 days.

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

SentinelOne  vs.  Box Inc

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 latest abnormal 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.

Box Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Box Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Box

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

The idea behind SentinelOne and Box Inc 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.