Correlation Between SentinelOne and Franklin Global

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

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

Diversification Opportunities for SentinelOne and Franklin Global

0.51

Correlation Coefficient

SentinelOne  Franklin Global

Very weak diversification

The 3 months correlation between SentinelOne and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Franklin Global Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Global Core 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 Franklin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Global Core has no effect on the direction of SentinelOne i.e., SentinelOne and Franklin Global go up and down completely randomly.

Pair Corralation between SentinelOne and Franklin Global

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Franklin Global. In addition to that, SentinelOne is 7.85 times more volatile than Franklin Global Core. It trades about -0.06 of its total potential returns per unit of risk. Franklin Global Core is currently generating about -0.04 per unit of volatility. If you would invest  1,885  in Franklin Global Core on October 23, 2024 and sell it today you would lose (17.00) from holding Franklin Global Core or give up 0.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

SentinelOne  vs.  Franklin Global Core

SentinelOne

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Franklin Global Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Global Core has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Franklin Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Franklin Global

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

The idea behind SentinelOne and Franklin Global Core 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.