Correlation Between SentinelOne and IShares Consumer

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

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

Diversification Opportunities for SentinelOne and IShares Consumer

0.82

Correlation Coefficient

SentinelOne  IShares Consumer

Very poor diversification

The 3 months correlation between SentinelOne and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and iShares Consumer Discretionary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Consumer Dis 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 IShares Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Consumer Dis has no effect on the direction of SentinelOne i.e., SentinelOne and IShares Consumer go up and down completely randomly.

Pair Corralation between SentinelOne and IShares Consumer

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the IShares Consumer. In addition to that, SentinelOne is 1.93 times more volatile than iShares Consumer Discretionary. It trades about -0.11 of its total potential returns per unit of risk. iShares Consumer Discretionary is currently generating about -0.12 per unit of volatility. If you would invest  9,662  in iShares Consumer Discretionary on December 29, 2024 and sell it today you would lose (858.00) from holding iShares Consumer Discretionary or give up 8.88% of portfolio value over 90 days.

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

SentinelOne  vs.  iShares Consumer Discretionary

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.

iShares Consumer Dis

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Consumer Discretionary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with SentinelOne and IShares Consumer

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

The idea behind SentinelOne and iShares Consumer Discretionary 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.