Correlation Between SentinelOne and NextTrip

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

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

Diversification Opportunities for SentinelOne and NextTrip

-0.55

Correlation Coefficient

SentinelOne  NextTrip

Excellent diversification

The 3 months correlation between SentinelOne and NextTrip is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and NextTrip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextTrip 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 NextTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextTrip has no effect on the direction of SentinelOne i.e., SentinelOne and NextTrip go up and down completely randomly.

Pair Corralation between SentinelOne and NextTrip

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.45 times less return on investment than NextTrip. But when comparing it to its historical volatility, SentinelOne is 5.02 times less risky than NextTrip. It trades about 0.14 of its potential returns per unit of risk. NextTrip is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  283.00  in NextTrip on September 4, 2024 and sell it today you would earn a total of  71.00  from holding NextTrip or generate 25.09% return on investment over 90 days.

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

SentinelOne  vs.  NextTrip

SentinelOne

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 9 (%) 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.

NextTrip

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NextTrip are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, NextTrip reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and NextTrip

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

The idea behind SentinelOne and NextTrip 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.