Correlation Between SentinelOne and Dominion Lending

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

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

Diversification Opportunities for SentinelOne and Dominion Lending

0.2

Correlation Coefficient

SentinelOne  Dominion Lending

Modest diversification

The 3 months correlation between SentinelOne and Dominion is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Dominion Lending Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Lending Centres 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 Dominion Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Lending Centres has no effect on the direction of SentinelOne i.e., SentinelOne and Dominion Lending go up and down completely randomly.

Pair Corralation between SentinelOne and Dominion Lending

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Dominion Lending. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.4 times less risky than Dominion Lending. The stock trades about -0.11 of its potential returns per unit of risk. The Dominion Lending Centres is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  785.00  in Dominion Lending Centres on December 24, 2024 and sell it today you would earn a total of  10.00  from holding Dominion Lending Centres or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

SentinelOne  vs.  Dominion Lending Centres

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.

Dominion Lending Centres

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dominion Lending Centres are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dominion Lending is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Dominion Lending

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

The idea behind SentinelOne and Dominion Lending Centres 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.