Correlation Between SentinelOne and Jade Gas

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

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

Diversification Opportunities for SentinelOne and Jade Gas

0.8

Correlation Coefficient

SentinelOne  Jade Gas

Very poor diversification

The 3 months correlation between SentinelOne and Jade is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Jade Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Gas Holdings 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 Jade Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Gas Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and Jade Gas go up and down completely randomly.

Pair Corralation between SentinelOne and Jade Gas

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Jade Gas. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.19 times less risky than Jade Gas. The stock trades about -0.06 of its potential returns per unit of risk. The Jade Gas Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3.80  in Jade Gas Holdings on October 23, 2024 and sell it today you would lose (0.45) from holding Jade Gas Holdings or give up 11.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

SentinelOne  vs.  Jade Gas Holdings

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 unsteady 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.

Jade Gas Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jade Gas Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SentinelOne and Jade Gas

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

The idea behind SentinelOne and Jade Gas Holdings 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.