Correlation Between SentinelOne and Conflux Network

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

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

Diversification Opportunities for SentinelOne and Conflux Network

0.32

Correlation Coefficient

SentinelOne  Conflux Network

Weak diversification

The 3 months correlation between SentinelOne and Conflux is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Conflux Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conflux Network 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 Conflux Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conflux Network has no effect on the direction of SentinelOne i.e., SentinelOne and Conflux Network go up and down completely randomly.

Pair Corralation between SentinelOne and Conflux Network

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.47 times less return on investment than Conflux Network. But when comparing it to its historical volatility, SentinelOne is 2.33 times less risky than Conflux Network. It trades about 0.12 of its potential returns per unit of risk. Conflux Network is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Conflux Network on August 30, 2024 and sell it today you would earn a total of  6.00  from holding Conflux Network or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SentinelOne  vs.  Conflux Network

SentinelOne

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Conflux Network

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Conflux Network are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Conflux Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Conflux Network

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

The idea behind SentinelOne and Conflux Network 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.