Correlation Between National Beverage and SentinelOne
Can any of the company-specific risk be diversified away by investing in both National Beverage and SentinelOne 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 National Beverage and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and SentinelOne, you can compare the effects of market volatilities on National Beverage and SentinelOne 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 National Beverage with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and SentinelOne.
Diversification Opportunities for National Beverage and SentinelOne
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and SentinelOne is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and National Beverage 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 National Beverage Corp are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of National Beverage i.e., National Beverage and SentinelOne go up and down completely randomly.
Pair Corralation between National Beverage and SentinelOne
Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the SentinelOne. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.52 times less risky than SentinelOne. The stock trades about -0.17 of its potential returns per unit of risk. The SentinelOne is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,248 in SentinelOne on January 25, 2024 and sell it today you would lose (80.50) from holding SentinelOne or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. SentinelOne
Performance |
| Timeline |
| National Beverage Corp |
| SentinelOne |
National Beverage and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and SentinelOne
The main advantage of trading using opposite National Beverage and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, SentinelOne 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 SentinelOne will offset losses from the drop in SentinelOne's long position.| National Beverage vs. Vita Coco | National Beverage vs. PepsiCo | National Beverage vs. The Coca Cola | National Beverage vs. Keurig Dr Pepper |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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