Correlation Between SentinelOne and Remark Holdings

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

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

Diversification Opportunities for SentinelOne and Remark Holdings

-0.44

Correlation Coefficient

SentinelOne  Remark Holdings

Very good diversification

The 3 months correlation between SentinelOne and Remark is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Remark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remark 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 Remark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remark Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and Remark Holdings go up and down completely randomly.

Pair Corralation between SentinelOne and Remark Holdings

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.51 times more return on investment than Remark Holdings. However, SentinelOne is 1.96 times less risky than Remark Holdings. It trades about 0.05 of its potential returns per unit of risk. Remark Holdings is currently generating about -0.02 per unit of risk. If you would invest  1,444  in SentinelOne on September 5, 2024 and sell it today you would earn a total of  1,311  from holding SentinelOne or generate 90.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	30.51%
Values	Daily Returns

SentinelOne  vs.  Remark Holdings

SentinelOne

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Remark Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remark Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Remark Holdings is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SentinelOne and Remark Holdings

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

The idea behind SentinelOne and Remark 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.