Correlation Between SentinelOne and Entergy

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

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

Diversification Opportunities for SentinelOne and Entergy

0.0

Correlation Coefficient

SentinelOne  Entergy

Pay attention - limited upside

The 3 months correlation between SentinelOne and Entergy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Entergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy 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 Entergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy has no effect on the direction of SentinelOne i.e., SentinelOne and Entergy go up and down completely randomly.

Pair Corralation between SentinelOne and Entergy

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Entergy. In addition to that, SentinelOne is 1.02 times more volatile than Entergy. It trades about -0.1 of its total potential returns per unit of risk. Entergy is currently generating about 0.07 per unit of volatility. If you would invest  7,098  in Entergy on December 22, 2024 and sell it today you would earn a total of  602.00  from holding Entergy or generate 8.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

SentinelOne  vs.  Entergy

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.

Entergy

Risk-Adjusted Performance

Modest

Over the last 90 days Entergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Entergy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SentinelOne and Entergy

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

The idea behind SentinelOne and Entergy 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.