Correlation Between SentinelOne and Data Modul

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

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

Diversification Opportunities for SentinelOne and Data Modul

0.26

Correlation Coefficient

SentinelOne  Data Modul

Modest diversification

The 3 months correlation between SentinelOne and Data is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Data Modul AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Modul AG 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 Data Modul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Modul AG has no effect on the direction of SentinelOne i.e., SentinelOne and Data Modul go up and down completely randomly.

Pair Corralation between SentinelOne and Data Modul

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Data Modul. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.02 times less risky than Data Modul. The stock trades about -0.1 of its potential returns per unit of risk. The Data Modul AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,700  in Data Modul AG on December 21, 2024 and sell it today you would lose (80.00) from holding Data Modul AG or give up 2.96% 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.  Data Modul AG

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.

Data Modul AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Modul AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Data Modul is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Data Modul

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

The idea behind SentinelOne and Data Modul AG 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.