Correlation Between SentinelOne and Superior Industries

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

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

Diversification Opportunities for SentinelOne and Superior Industries

0.79

Correlation Coefficient

SentinelOne  Superior Industries

Poor diversification

The 3 months correlation between SentinelOne and Superior is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries 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 Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of SentinelOne i.e., SentinelOne and Superior Industries go up and down completely randomly.

Pair Corralation between SentinelOne and Superior Industries

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.75 times more return on investment than Superior Industries. However, SentinelOne is 1.34 times less risky than Superior Industries. It trades about -0.05 of its potential returns per unit of risk. Superior Industries International is currently generating about -0.07 per unit of risk. If you would invest  2,762  in SentinelOne on November 19, 2024 and sell it today you would lose (282.00) from holding SentinelOne or give up 10.21% of portfolio value over 90 days.

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

SentinelOne  vs.  Superior Industries Internatio

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 latest weak 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.

Superior Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Superior Industries International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SentinelOne and Superior Industries

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

The idea behind SentinelOne and Superior Industries International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.