Correlation Between SentinelOne and Multi Units

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and Multi Units 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 Multi Units into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Multi Units Luxembourg, you can compare the effects of market volatilities on SentinelOne and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Multi Units.

Diversification Opportunities for SentinelOne and Multi Units

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between SentinelOne and Multi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of SentinelOne i.e., SentinelOne and Multi Units go up and down completely randomly.

Pair Corralation between SentinelOne and Multi Units

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Multi Units. In addition to that, SentinelOne is 1.81 times more volatile than Multi Units Luxembourg. It trades about -0.17 of its total potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.0 per unit of volatility. If you would invest  5,612  in Multi Units Luxembourg on October 8, 2024 and sell it today you would lose (3.00) from holding Multi Units Luxembourg or give up 0.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.74%
ValuesDaily Returns

SentinelOne  vs.  Multi Units Luxembourg

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

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Weak
 
Strong
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.
Multi Units Luxembourg 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Multi Units Luxembourg 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 Etf's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

SentinelOne and Multi Units Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and Multi Units

The main advantage of trading using opposite SentinelOne and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.
The idea behind SentinelOne and Multi Units Luxembourg 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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