Correlation Between SentinelOne and Innovator Equity

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

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

Diversification Opportunities for SentinelOne and Innovator Equity

0.56

Correlation Coefficient

SentinelOne  Innovator Equity

Very weak diversification

The 3 months correlation between SentinelOne and Innovator is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Innovator Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Equity Premium 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 Innovator Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Equity Premium has no effect on the direction of SentinelOne i.e., SentinelOne and Innovator Equity go up and down completely randomly.

Pair Corralation between SentinelOne and Innovator Equity

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Innovator Equity. In addition to that, SentinelOne is 7.58 times more volatile than Innovator Equity Premium. It trades about -0.11 of its total potential returns per unit of risk. Innovator Equity Premium is currently generating about 0.0 per unit of volatility. If you would invest  2,463  in Innovator Equity Premium on December 30, 2024 and sell it today you would lose (2.00) from holding Innovator Equity Premium or give up 0.08% of portfolio value over 90 days.

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

SentinelOne  vs.  Innovator Equity Premium

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.

Innovator Equity Premium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator Equity Premium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Innovator Equity is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SentinelOne and Innovator Equity

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

The idea behind SentinelOne and Innovator Equity Premium 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.