Correlation Between Spar Nord and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Spar Nord 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 Spar Nord and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spar Nord Bank and SentinelOne, you can compare the effects of market volatilities on Spar Nord 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 Spar Nord with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and SentinelOne.
Diversification Opportunities for Spar Nord and SentinelOne
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spar and SentinelOne is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Spar Nord 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 Spar Nord Bank 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 Spar Nord i.e., Spar Nord and SentinelOne go up and down completely randomly.
Pair Corralation between Spar Nord and SentinelOne
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.41 times more return on investment than SentinelOne. However, Spar Nord Bank is 2.47 times less risky than SentinelOne. It trades about 0.08 of its potential returns per unit of risk. SentinelOne is currently generating about 0.01 per unit of risk. If you would invest 7,053 in Spar Nord Bank on January 25, 2024 and sell it today you would earn a total of 5,647 from holding Spar Nord Bank or generate 80.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Spar Nord Bank vs. SentinelOne
Performance |
| Timeline |
| Spar Nord Bank |
| SentinelOne |
Spar Nord and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and SentinelOne
The main advantage of trading using opposite Spar Nord and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord 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 Spar Nord Bank 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. 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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