Correlation Between SentinelOne and Hashicorp

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

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

Diversification Opportunities for SentinelOne and Hashicorp

-0.04

Correlation Coefficient

SentinelOne  Hashicorp

Good diversification

The 3 months correlation between SentinelOne and Hashicorp is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Hashicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashicorp 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 Hashicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashicorp has no effect on the direction of SentinelOne i.e., SentinelOne and Hashicorp go up and down completely randomly.

Pair Corralation between SentinelOne and Hashicorp

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Hashicorp. In addition to that, SentinelOne is 11.64 times more volatile than Hashicorp. It trades about -0.25 of its total potential returns per unit of risk. Hashicorp is currently generating about 0.25 per unit of volatility. If you would invest  3,361  in Hashicorp on September 20, 2024 and sell it today you would earn a total of  62.50  from holding Hashicorp or generate 1.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

SentinelOne  vs.  Hashicorp

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 weak 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.

Hashicorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hashicorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Hashicorp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SentinelOne and Hashicorp

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

The idea behind SentinelOne and Hashicorp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..