Correlation Between SentinelOne and Companhia Paranaense

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

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

Diversification Opportunities for SentinelOne and Companhia Paranaense

-0.38

Correlation Coefficient

SentinelOne  Companhia Paranaense

Very good diversification

The 3 months correlation between SentinelOne and Companhia is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of SentinelOne i.e., SentinelOne and Companhia Paranaense go up and down completely randomly.

Pair Corralation between SentinelOne and Companhia Paranaense

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Companhia Paranaense. In addition to that, SentinelOne is 1.31 times more volatile than Companhia Paranaense de. It trades about -0.11 of its total potential returns per unit of risk. Companhia Paranaense de is currently generating about 0.19 per unit of volatility. If you would invest  594.00  in Companhia Paranaense de on December 30, 2024 and sell it today you would earn a total of  137.00  from holding Companhia Paranaense de or generate 23.06% return on investment over 90 days.

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

SentinelOne  vs.  Companhia Paranaense de

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.

Companhia Paranaense

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Paranaense de are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Companhia Paranaense reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Companhia Paranaense

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

The idea behind SentinelOne and Companhia Paranaense de 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.