Correlation Between SentinelOne and InsuraGuest Technologies

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

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

Diversification Opportunities for SentinelOne and InsuraGuest Technologies

0.6

Correlation Coefficient

SentinelOne  InsuraGuest Technologies

Poor diversification

The 3 months correlation between SentinelOne and InsuraGuest is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and InsuraGuest Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InsuraGuest Technologies 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 InsuraGuest Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InsuraGuest Technologies has no effect on the direction of SentinelOne i.e., SentinelOne and InsuraGuest Technologies go up and down completely randomly.

Pair Corralation between SentinelOne and InsuraGuest Technologies

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the InsuraGuest Technologies. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 4.09 times less risky than InsuraGuest Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The InsuraGuest Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.12  in InsuraGuest Technologies on October 7, 2024 and sell it today you would earn a total of  1.65  from holding InsuraGuest Technologies or generate 147.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.13%
Values	Daily Returns

SentinelOne  vs.  InsuraGuest Technologies

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

InsuraGuest Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InsuraGuest Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, InsuraGuest Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and InsuraGuest Technologies

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

The idea behind SentinelOne and InsuraGuest Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.