Correlation Between SentinelOne and DHT Holdings

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

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

Diversification Opportunities for SentinelOne and DHT Holdings

-0.04

Correlation Coefficient

SentinelOne  DHT Holdings

Good diversification

The 3 months correlation between SentinelOne and DHT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and DHT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHT Holdings 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 DHT Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHT Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and DHT Holdings go up and down completely randomly.

Pair Corralation between SentinelOne and DHT Holdings

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the DHT Holdings. In addition to that, SentinelOne is 1.12 times more volatile than DHT Holdings. It trades about -0.05 of its total potential returns per unit of risk. DHT Holdings is currently generating about 0.06 per unit of volatility. If you would invest  1,040  in DHT Holdings on November 19, 2024 and sell it today you would earn a total of  79.00  from holding DHT Holdings or generate 7.6% return on investment over 90 days.

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

SentinelOne  vs.  DHT Holdings

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 weak 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.

DHT Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DHT Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical indicators, DHT Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with SentinelOne and DHT Holdings

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

The idea behind SentinelOne and DHT Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.