Correlation Between SentinelOne and CANADA RARE

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

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

Diversification Opportunities for SentinelOne and CANADA RARE

0.12

Correlation Coefficient

SentinelOne  CANADA RARE

Average diversification

The 3 months correlation between SentinelOne and CANADA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and CANADA RARE EARTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANADA RARE EARTH 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 CANADA RARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANADA RARE EARTH has no effect on the direction of SentinelOne i.e., SentinelOne and CANADA RARE go up and down completely randomly.

Pair Corralation between SentinelOne and CANADA RARE

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the CANADA RARE. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 18.46 times less risky than CANADA RARE. The stock trades about -0.14 of its potential returns per unit of risk. The CANADA RARE EARTH is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1.50  in CANADA RARE EARTH on November 28, 2024 and sell it today you would lose (1.00) from holding CANADA RARE EARTH or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

SentinelOne  vs.  CANADA RARE EARTH

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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CANADA RARE EARTH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CANADA RARE EARTH are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CANADA RARE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and CANADA RARE

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

The idea behind SentinelOne and CANADA RARE EARTH 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.