Correlation Between SentinelOne and SWRV

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

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

Diversification Opportunities for SentinelOne and SWRV

0.51

Correlation Coefficient

SentinelOne  SWRV

Very weak diversification

The 3 months correlation between SentinelOne and SWRV is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and SWRV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWRV 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 SWRV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWRV has no effect on the direction of SentinelOne i.e., SentinelOne and SWRV go up and down completely randomly.

Pair Corralation between SentinelOne and SWRV

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.25 times more return on investment than SWRV. However, SentinelOne is 4.04 times less risky than SWRV. It trades about -0.11 of its potential returns per unit of risk. SWRV is currently generating about -0.05 per unit of risk. If you would invest  2,246  in SentinelOne on December 30, 2024 and sell it today you would lose (362.00) from holding SentinelOne or give up 16.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

SentinelOne  vs.  SWRV

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

SWRV

Risk-Adjusted Performance

Very Weak

Over the last 90 days SWRV 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 Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for SWRV shareholders.

Pair Trading with SentinelOne and SWRV

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

The idea behind SentinelOne and SWRV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.