Correlation Between SentinelOne and Martin Marietta

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

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

Diversification Opportunities for SentinelOne and Martin Marietta

0.88

Correlation Coefficient

SentinelOne  Martin Marietta

Very poor diversification

The 3 months correlation between SentinelOne and Martin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of SentinelOne i.e., SentinelOne and Martin Marietta go up and down completely randomly.

Pair Corralation between SentinelOne and Martin Marietta

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Martin Marietta. In addition to that, SentinelOne is 1.56 times more volatile than Martin Marietta Materials. It trades about -0.11 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.08 per unit of volatility. If you would invest  51,940  in Martin Marietta Materials on December 30, 2024 and sell it today you would lose (4,140) from holding Martin Marietta Materials or give up 7.97% of portfolio value over 90 days.

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

SentinelOne  vs.  Martin Marietta Materials

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 unsteady 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.

Martin Marietta Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Martin Marietta Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with SentinelOne and Martin Marietta

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

The idea behind SentinelOne and Martin Marietta Materials 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.