Correlation Between SentinelOne and 50249AAH6

Can any of the company-specific risk be diversified away by investing in both SentinelOne and 50249AAH6 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 50249AAH6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SentinelOne and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on SentinelOne and 50249AAH6 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 50249AAH6. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and 50249AAH6.

Diversification Opportunities for SentinelOne and 50249AAH6

0.63

Correlation Coefficient

SentinelOne  50249AAH6

Poor diversification

The 3 months correlation between SentinelOne and 50249AAH6 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAH6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of SentinelOne i.e., SentinelOne and 50249AAH6 go up and down completely randomly.

Pair Corralation between SentinelOne and 50249AAH6

Taking into account the 90-day investment horizon SentinelOne is expected to generate 16.2 times less return on investment than 50249AAH6. But when comparing it to its historical volatility, SentinelOne is 13.79 times less risky than 50249AAH6. It trades about 0.04 of its potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,779  in LYB INTERNATIONAL FINANCE on October 23, 2024 and sell it today you would lose (254.00) from holding LYB INTERNATIONAL FINANCE or give up 3.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	79.55%
Values	Daily Returns

SentinelOne  vs.  LYB INTERNATIONAL FINANCE

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.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAH6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and 50249AAH6

The main advantage of trading using opposite SentinelOne and 50249AAH6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, 50249AAH6 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 50249AAH6 will offset losses from the drop in 50249AAH6's long position.

The idea behind SentinelOne and LYB INTERNATIONAL FINANCE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..