Correlation Between SentinelOne and SPDR Gold

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

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

Diversification Opportunities for SentinelOne and SPDR Gold

-0.49

Correlation Coefficient

SentinelOne  SPDR Gold

Very good diversification

The 3 months correlation between SentinelOne and SPDR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and SPDR Gold MiniShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold MiniShares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold MiniShares has no effect on the direction of SentinelOne i.e., SentinelOne and SPDR Gold go up and down completely randomly.

Pair Corralation between SentinelOne and SPDR Gold

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the SPDR Gold. In addition to that, SentinelOne is 2.84 times more volatile than SPDR Gold MiniShares. It trades about -0.09 of its total potential returns per unit of risk. SPDR Gold MiniShares is currently generating about 0.33 per unit of volatility. If you would invest  5,165  in SPDR Gold MiniShares on December 29, 2024 and sell it today you would earn a total of  938.00  from holding SPDR Gold MiniShares or generate 18.16% 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.  SPDR Gold MiniShares

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.

SPDR Gold MiniShares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold MiniShares are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, SPDR Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and SPDR Gold

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

The idea behind SentinelOne and SPDR Gold MiniShares 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.