Correlation Between SentinelOne and Penta-Ocean Construction

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

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

Diversification Opportunities for SentinelOne and Penta-Ocean Construction

-0.4

Correlation Coefficient

SentinelOne  Penta-Ocean Construction

Very good diversification

The 3 months correlation between SentinelOne and Penta-Ocean is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta-Ocean Construction 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 Penta-Ocean Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta-Ocean Construction has no effect on the direction of SentinelOne i.e., SentinelOne and Penta-Ocean Construction go up and down completely randomly.

Pair Corralation between SentinelOne and Penta-Ocean Construction

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Penta-Ocean Construction. In addition to that, SentinelOne is 1.43 times more volatile than Penta Ocean Construction Co. It trades about -0.16 of its total potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.08 per unit of volatility. If you would invest  376.00  in Penta Ocean Construction Co on November 28, 2024 and sell it today you would earn a total of  34.00  from holding Penta Ocean Construction Co or generate 9.04% 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.  Penta Ocean Construction Co

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.

Penta-Ocean Construction

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penta-Ocean Construction may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with SentinelOne and Penta-Ocean Construction

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

The idea behind SentinelOne and Penta Ocean Construction Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.