Correlation Between SentinelOne and First Fidelity

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

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

Diversification Opportunities for SentinelOne and First Fidelity

0.41

Correlation Coefficient

SentinelOne  First Fidelity

Very weak diversification

The 3 months correlation between SentinelOne and First is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and First Fidelity Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Fidelity Leasing 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 First Fidelity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Fidelity Leasing has no effect on the direction of SentinelOne i.e., SentinelOne and First Fidelity go up and down completely randomly.

Pair Corralation between SentinelOne and First Fidelity

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the First Fidelity. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.51 times less risky than First Fidelity. The stock trades about -0.1 of its potential returns per unit of risk. The First Fidelity Leasing is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  235.00  in First Fidelity Leasing on December 23, 2024 and sell it today you would lose (24.00) from holding First Fidelity Leasing or give up 10.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

SentinelOne  vs.  First Fidelity Leasing

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.

First Fidelity Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Fidelity Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SentinelOne and First Fidelity

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

The idea behind SentinelOne and First Fidelity Leasing 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.