Correlation Between Advance Auto and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Advance Auto 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 Advance Auto and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and SentinelOne, you can compare the effects of market volatilities on Advance Auto 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 Advance Auto with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and SentinelOne.
Diversification Opportunities for Advance Auto and SentinelOne
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advance and SentinelOne is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Advance Auto 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 Advance Auto Parts 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 Advance Auto i.e., Advance Auto and SentinelOne go up and down completely randomly.
Pair Corralation between Advance Auto and SentinelOne
Considering the 90-day investment horizon Advance Auto Parts is expected to under-perform the SentinelOne. In addition to that, Advance Auto is 1.11 times more volatile than SentinelOne. It trades about -0.16 of its total potential returns per unit of risk. SentinelOne is currently generating about -0.05 per unit of volatility. If you would invest 2,222 in SentinelOne on January 26, 2024 and sell it today you would lose (65.00) from holding SentinelOne or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Auto Parts vs. SentinelOne
Performance |
| Timeline |
| Advance Auto Parts |
| SentinelOne |
Advance Auto and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and SentinelOne
The main advantage of trading using opposite Advance Auto and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto 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.| Advance Auto vs. Target | Advance Auto vs. Lowes Companies | Advance Auto vs. Kohls Corp | Advance Auto vs. Gap Inc |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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