Correlation Between SentinelOne and Eco Growth

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

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

Diversification Opportunities for SentinelOne and Eco Growth

-0.31

Correlation Coefficient

SentinelOne  Eco Growth

Very good diversification

The 3 months correlation between SentinelOne and Eco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Eco Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Growth Strategies 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 Eco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Growth Strategies has no effect on the direction of SentinelOne i.e., SentinelOne and Eco Growth go up and down completely randomly.

Pair Corralation between SentinelOne and Eco Growth

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Eco Growth. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 12.67 times less risky than Eco Growth. The stock trades about -0.09 of its potential returns per unit of risk. The Eco Growth Strategies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3.62  in Eco Growth Strategies on December 20, 2024 and sell it today you would earn a total of  8.38  from holding Eco Growth Strategies or generate 231.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

SentinelOne  vs.  Eco Growth Strategies

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.

Eco Growth Strategies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Growth Strategies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Eco Growth unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Eco Growth

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

The idea behind SentinelOne and Eco Growth Strategies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.