Correlation Between SentinelOne and Galapagos
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Galapagos 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 Galapagos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Galapagos NV ADR, you can compare the effects of market volatilities on SentinelOne and Galapagos 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 Galapagos. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Galapagos.
Diversification Opportunities for SentinelOne and Galapagos
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SentinelOne and Galapagos is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Galapagos NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galapagos NV ADR 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 Galapagos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galapagos NV ADR has no effect on the direction of SentinelOne i.e., SentinelOne and Galapagos go up and down completely randomly.
Pair Corralation between SentinelOne and Galapagos
Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.92 times more return on investment than Galapagos. However, SentinelOne is 1.92 times more volatile than Galapagos NV ADR. It trades about -0.21 of its potential returns per unit of risk. Galapagos NV ADR is currently generating about -0.59 per unit of risk. If you would invest 2,285 in SentinelOne on January 19, 2024 and sell it today you would lose (224.00) from holding SentinelOne or give up 9.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SentinelOne vs. Galapagos NV ADR
Performance |
| Timeline |
| SentinelOne |
| Galapagos NV ADR |
SentinelOne and Galapagos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Galapagos
The main advantage of trading using opposite SentinelOne and Galapagos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Galapagos 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 Galapagos will offset losses from the drop in Galapagos' long position.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Galapagos vs. Home Federal Bancorp | Galapagos vs. Betterware De Mexico | Galapagos vs. Provident Bancorp | Galapagos vs. Heartland Financial USA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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