Correlation Between Meta Platforms and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Meta Platforms 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 Meta Platforms and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and SentinelOne, you can compare the effects of market volatilities on Meta Platforms 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 Meta Platforms with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and SentinelOne.
Diversification Opportunities for Meta Platforms and SentinelOne
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meta and SentinelOne is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and SentinelOne go up and down completely randomly.
Pair Corralation between Meta Platforms and SentinelOne
If you would invest 1,548 in SentinelOne on January 24, 2024 and sell it today you would earn a total of 499.00 from holding SentinelOne or generate 32.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.54% |
| Values | Daily Returns |
Meta Platforms vs. SentinelOne
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SentinelOne |
Meta Platforms and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and SentinelOne
The main advantage of trading using opposite Meta Platforms and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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.| Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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