Correlation Between SentinelOne and COFI

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

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

Diversification Opportunities for SentinelOne and COFI

0.85

Correlation Coefficient

SentinelOne  COFI

Very poor diversification

The 3 months correlation between SentinelOne and COFI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and COFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFI 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 COFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFI has no effect on the direction of SentinelOne i.e., SentinelOne and COFI go up and down completely randomly.

Pair Corralation between SentinelOne and COFI

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the COFI. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 5.38 times less risky than COFI. The stock trades about -0.11 of its potential returns per unit of risk. The COFI is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  0.04  in COFI on December 30, 2024 and sell it today you would lose (0.02) from holding COFI or give up 43.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.38%
Values	Daily Returns

SentinelOne  vs.  COFI

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.

COFI

Risk-Adjusted Performance

Very Weak

Over the last 90 days COFI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for COFI shareholders.

Pair Trading with SentinelOne and COFI

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

The idea behind SentinelOne and COFI 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.