Correlation Between SentinelOne and Informatica

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

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

Diversification Opportunities for SentinelOne and Informatica

0.19

Correlation Coefficient

SentinelOne  Informatica

Average diversification

The 3 months correlation between SentinelOne and Informatica is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Informatica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informatica 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 Informatica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informatica has no effect on the direction of SentinelOne i.e., SentinelOne and Informatica go up and down completely randomly.

Pair Corralation between SentinelOne and Informatica

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Informatica. In addition to that, SentinelOne is 2.07 times more volatile than Informatica. It trades about -0.22 of its total potential returns per unit of risk. Informatica is currently generating about 0.05 per unit of volatility. If you would invest  2,574  in Informatica on September 20, 2024 and sell it today you would earn a total of  39.00  from holding Informatica or generate 1.52% return on investment over 90 days.

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

SentinelOne  vs.  Informatica

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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Informatica

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Informatica is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Informatica

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

The idea behind SentinelOne and Informatica 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.

Check out your portfolio center.

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.