Correlation Between SentinelOne and Swatch Group

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

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

Diversification Opportunities for SentinelOne and Swatch Group

0.07

Correlation Coefficient

SentinelOne  Swatch Group

Significant diversification

The 3 months correlation between SentinelOne and Swatch is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Swatch Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group AG 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group AG has no effect on the direction of SentinelOne i.e., SentinelOne and Swatch Group go up and down completely randomly.

Pair Corralation between SentinelOne and Swatch Group

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Swatch Group. In addition to that, SentinelOne is 1.37 times more volatile than Swatch Group AG. It trades about -0.11 of its total potential returns per unit of risk. Swatch Group AG is currently generating about -0.04 per unit of volatility. If you would invest  16,500  in Swatch Group AG on December 30, 2024 and sell it today you would lose (850.00) from holding Swatch Group AG or give up 5.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SentinelOne  vs.  Swatch Group AG

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.

Swatch Group AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swatch Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Swatch Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SentinelOne and Swatch Group

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

The idea behind SentinelOne and Swatch Group AG 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.