Correlation Between SentinelOne and MAG Silver

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

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

Diversification Opportunities for SentinelOne and MAG Silver

-0.02

Correlation Coefficient

SentinelOne  MAG Silver

Good diversification

The 3 months correlation between SentinelOne and MAG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp 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 MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of SentinelOne i.e., SentinelOne and MAG Silver go up and down completely randomly.

Pair Corralation between SentinelOne and MAG Silver

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the MAG Silver. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.34 times less risky than MAG Silver. The stock trades about -0.09 of its potential returns per unit of risk. The MAG Silver Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,330  in MAG Silver Corp on December 28, 2024 and sell it today you would earn a total of  333.00  from holding MAG Silver Corp or generate 25.04% return on investment over 90 days.

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

SentinelOne  vs.  MAG Silver Corp

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 abnormal 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.

MAG Silver Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAG Silver Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, MAG Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and MAG Silver

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

The idea behind SentinelOne and MAG Silver Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.