Correlation Between SentinelOne and Franklin Liberty

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

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

Diversification Opportunities for SentinelOne and Franklin Liberty

-0.05

Correlation Coefficient

SentinelOne  Franklin Liberty

Good diversification

The 3 months correlation between SentinelOne and Franklin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Franklin Liberty High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty High 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 Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty High has no effect on the direction of SentinelOne i.e., SentinelOne and Franklin Liberty go up and down completely randomly.

Pair Corralation between SentinelOne and Franklin Liberty

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Franklin Liberty. In addition to that, SentinelOne is 10.32 times more volatile than Franklin Liberty High. It trades about -0.14 of its total potential returns per unit of risk. Franklin Liberty High is currently generating about 0.07 per unit of volatility. If you would invest  2,388  in Franklin Liberty High on November 28, 2024 and sell it today you would earn a total of  27.00  from holding Franklin Liberty High or generate 1.13% return on investment over 90 days.

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

SentinelOne  vs.  Franklin Liberty High

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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Franklin Liberty High

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Liberty High are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Franklin Liberty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Franklin Liberty

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

The idea behind SentinelOne and Franklin Liberty High 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.