Correlation Between SentinelOne and China Coal

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

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

Diversification Opportunities for SentinelOne and China Coal

0.34

Correlation Coefficient

SentinelOne  China Coal

Weak diversification

The 3 months correlation between SentinelOne and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of SentinelOne i.e., SentinelOne and China Coal go up and down completely randomly.

Pair Corralation between SentinelOne and China Coal

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.03 times more return on investment than China Coal. However, SentinelOne is 1.03 times more volatile than China Coal Energy. It trades about -0.11 of its potential returns per unit of risk. China Coal Energy is currently generating about -0.12 per unit of risk. If you would invest  2,246  in SentinelOne on December 29, 2024 and sell it today you would lose (362.00) from holding SentinelOne or give up 16.12% of portfolio value over 90 days.

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

SentinelOne  vs.  China Coal Energy

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 unsteady 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.

China Coal Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Coal Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SentinelOne and China Coal

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

The idea behind SentinelOne and China Coal Energy 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.