Correlation Between Macys and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and SentinelOne, you can compare the effects of market volatilities on Macys 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 Macys with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and SentinelOne.
Diversification Opportunities for Macys and SentinelOne
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macys and SentinelOne is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Macys 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 Macys Inc 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 Macys i.e., Macys and SentinelOne go up and down completely randomly.
Pair Corralation between Macys and SentinelOne
Taking into account the 90-day investment horizon Macys Inc is expected to generate 0.96 times more return on investment than SentinelOne. However, Macys Inc is 1.04 times less risky than SentinelOne. It trades about 0.11 of its potential returns per unit of risk. SentinelOne is currently generating about 0.06 per unit of risk. If you would invest 1,178 in Macys Inc on January 24, 2024 and sell it today you would earn a total of 724.00 from holding Macys Inc or generate 61.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. SentinelOne
Performance |
| Timeline |
| Macys Inc |
| SentinelOne |
Macys and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and SentinelOne
The main advantage of trading using opposite Macys and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| SentinelOne vs. Block Inc | SentinelOne vs. Adobe Systems Incorporated | SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Cloudflare |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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