Correlation Between SentinelOne and Mfs Mid

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

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

Diversification Opportunities for SentinelOne and Mfs Mid

-0.53

Correlation Coefficient

SentinelOne  Mfs Mid

Excellent diversification

The 3 months correlation between SentinelOne and Mfs is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap 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 Mfs Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of SentinelOne i.e., SentinelOne and Mfs Mid go up and down completely randomly.

Pair Corralation between SentinelOne and Mfs Mid

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Mfs Mid. In addition to that, SentinelOne is 5.19 times more volatile than Mfs Mid Cap. It trades about -0.15 of its total potential returns per unit of risk. Mfs Mid Cap is currently generating about 0.02 per unit of volatility. If you would invest  2,911  in Mfs Mid Cap on January 31, 2024 and sell it today you would earn a total of  10.00  from holding Mfs Mid Cap or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SentinelOne  vs.  Mfs Mid Cap

SentinelOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mfs Mid Cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Mid Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mfs Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Mfs Mid

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

The idea behind SentinelOne and Mfs Mid Cap 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .