Correlation Between Elbit Imaging and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Elbit Imaging 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 Elbit Imaging and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Imaging and SentinelOne, you can compare the effects of market volatilities on Elbit Imaging 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 Elbit Imaging with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and SentinelOne.
Diversification Opportunities for Elbit Imaging and SentinelOne
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elbit and SentinelOne is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging i.e., Elbit Imaging and SentinelOne go up and down completely randomly.
Pair Corralation between Elbit Imaging and SentinelOne
Assuming the 90 days trading horizon Elbit Imaging is expected to generate 1.01 times more return on investment than SentinelOne. However, Elbit Imaging is 1.01 times more volatile than SentinelOne. It trades about -0.13 of its potential returns per unit of risk. SentinelOne is currently generating about -0.27 per unit of risk. If you would invest 37,300 in Elbit Imaging on January 20, 2024 and sell it today you would lose (2,000) from holding Elbit Imaging or give up 5.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Elbit Imaging vs. SentinelOne
Performance |
| Timeline |
| Elbit Imaging |
| SentinelOne |
Elbit Imaging and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Imaging and SentinelOne
The main advantage of trading using opposite Elbit Imaging and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging 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.The idea behind Elbit Imaging and SentinelOne 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.| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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