Correlation Between SentinelOne and Erf Wireless

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

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

Diversification Opportunities for SentinelOne and Erf Wireless

0.01

Correlation Coefficient

SentinelOne  Erf Wireless

Significant diversification

The 3 months correlation between SentinelOne and Erf is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Erf Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erf Wireless 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 Erf Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erf Wireless has no effect on the direction of SentinelOne i.e., SentinelOne and Erf Wireless go up and down completely randomly.

Pair Corralation between SentinelOne and Erf Wireless

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Erf Wireless. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 54.5 times less risky than Erf Wireless. The stock trades about -0.09 of its potential returns per unit of risk. The Erf Wireless is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Erf Wireless on December 20, 2024 and sell it today you would earn a total of  0.01  from holding Erf Wireless or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

SentinelOne  vs.  Erf Wireless

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.

Erf Wireless

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Erf Wireless are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Erf Wireless sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Erf Wireless

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

The idea behind SentinelOne and Erf Wireless 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.