Correlation Between SentinelOne and Yield Guild

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

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

Diversification Opportunities for SentinelOne and Yield Guild

0.76

Correlation Coefficient

SentinelOne  Yield Guild

Poor diversification

The 3 months correlation between SentinelOne and Yield is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Yield Guild Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yield Guild Games 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 Yield Guild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yield Guild Games has no effect on the direction of SentinelOne i.e., SentinelOne and Yield Guild go up and down completely randomly.

Pair Corralation between SentinelOne and Yield Guild

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.51 times less return on investment than Yield Guild. But when comparing it to its historical volatility, SentinelOne is 2.68 times less risky than Yield Guild. It trades about 0.12 of its potential returns per unit of risk. Yield Guild Games is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Yield Guild Games on August 30, 2024 and sell it today you would earn a total of  28.00  from holding Yield Guild Games or generate 73.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

SentinelOne  vs.  Yield Guild Games

SentinelOne

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Yield Guild Games

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yield Guild Games are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Yield Guild exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Yield Guild

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

The idea behind SentinelOne and Yield Guild Games 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.