Correlation Between SentinelOne and Major Cineplex

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

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

Diversification Opportunities for SentinelOne and Major Cineplex

-0.17

Correlation Coefficient

SentinelOne  Major Cineplex

Good diversification

The 3 months correlation between SentinelOne and Major is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex Group 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 Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of SentinelOne i.e., SentinelOne and Major Cineplex go up and down completely randomly.

Pair Corralation between SentinelOne and Major Cineplex

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.18 times more return on investment than Major Cineplex. However, SentinelOne is 2.18 times more volatile than Major Cineplex Group. It trades about 0.05 of its potential returns per unit of risk. Major Cineplex Group is currently generating about 0.11 per unit of risk. If you would invest  1,976  in SentinelOne on October 7, 2024 and sell it today you would earn a total of  305.00  from holding SentinelOne or generate 15.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.03%
Values	Daily Returns

SentinelOne  vs.  Major Cineplex Group

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 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.

Major Cineplex Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Major Cineplex Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Major Cineplex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Major Cineplex

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

The idea behind SentinelOne and Major Cineplex Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.