Correlation Between SentinelOne and Goldman Sachs

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

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

Diversification Opportunities for SentinelOne and Goldman Sachs

-0.42

Correlation Coefficient

SentinelOne  Goldman Sachs

Very good diversification

The 3 months correlation between SentinelOne and Goldman is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Goldman Sachs Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Global 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Global has no effect on the direction of SentinelOne i.e., SentinelOne and Goldman Sachs go up and down completely randomly.

Pair Corralation between SentinelOne and Goldman Sachs

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Goldman Sachs. In addition to that, SentinelOne is 2.83 times more volatile than Goldman Sachs Global. It trades about -0.1 of its total potential returns per unit of risk. Goldman Sachs Global is currently generating about 0.13 per unit of volatility. If you would invest  1,189  in Goldman Sachs Global on December 22, 2024 and sell it today you would earn a total of  79.00  from holding Goldman Sachs Global or generate 6.64% return on investment over 90 days.

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

SentinelOne  vs.  Goldman Sachs Global

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.

Goldman Sachs Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Global are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SentinelOne and Goldman Sachs

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

The idea behind SentinelOne and Goldman Sachs Global 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.