Correlation Between Annaly Capital and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Annaly Capital 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 Annaly Capital and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Annaly Capital Management and SentinelOne, you can compare the effects of market volatilities on Annaly Capital 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 Annaly Capital with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and SentinelOne.
Diversification Opportunities for Annaly Capital and SentinelOne
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Annaly and SentinelOne is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Annaly Capital 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 Annaly Capital Management 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 Annaly Capital i.e., Annaly Capital and SentinelOne go up and down completely randomly.
Pair Corralation between Annaly Capital and SentinelOne
Considering the 90-day investment horizon Annaly Capital is expected to generate 1.72 times less return on investment than SentinelOne. But when comparing it to its historical volatility, Annaly Capital Management is 2.24 times less risky than SentinelOne. It trades about 0.1 of its potential returns per unit of risk. SentinelOne is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,605 in SentinelOne on January 19, 2024 and sell it today you would earn a total of 456.00 from holding SentinelOne or generate 28.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Annaly Capital Management vs. SentinelOne
Performance |
| Timeline |
| Annaly Capital Management |
| SentinelOne |
Annaly Capital and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and SentinelOne
The main advantage of trading using opposite Annaly Capital and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital 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.| Annaly Capital vs. ARMOUR Residential REIT | Annaly Capital vs. Two Harbors Investments | Annaly Capital vs. Arbor Realty Trust | Annaly Capital vs. Chimera Investment |
| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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