Correlation Between SentinelOne and PHENIXFIN

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

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

Diversification Opportunities for SentinelOne and PHENIXFIN

-0.77

Correlation Coefficient

SentinelOne  PHENIXFIN

Pay attention - limited upside

The 3 months correlation between SentinelOne and PHENIXFIN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and PHENIXFIN P DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHENIXFIN P DL 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 PHENIXFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHENIXFIN P DL has no effect on the direction of SentinelOne i.e., SentinelOne and PHENIXFIN go up and down completely randomly.

Pair Corralation between SentinelOne and PHENIXFIN

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the PHENIXFIN. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.16 times less risky than PHENIXFIN. The stock trades about -0.02 of its potential returns per unit of risk. The PHENIXFIN P DL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,680  in PHENIXFIN P DL on October 23, 2024 and sell it today you would lose (20.00) from holding PHENIXFIN P DL or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

SentinelOne  vs.  PHENIXFIN P DL

SentinelOne

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

PHENIXFIN P DL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SentinelOne and PHENIXFIN

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

The idea behind SentinelOne and PHENIXFIN P DL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.