Correlation Between Teradyne and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Teradyne 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 Teradyne and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and SentinelOne, you can compare the effects of market volatilities on Teradyne 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 Teradyne with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and SentinelOne.
Diversification Opportunities for Teradyne and SentinelOne
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teradyne and SentinelOne is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Teradyne 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 Teradyne 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 Teradyne i.e., Teradyne and SentinelOne go up and down completely randomly.
Pair Corralation between Teradyne and SentinelOne
Considering the 90-day investment horizon Teradyne is expected to generate 1.08 times less return on investment than SentinelOne. But when comparing it to its historical volatility, Teradyne is 1.49 times less risky than SentinelOne. It trades about 0.13 of its potential returns per unit of risk. SentinelOne is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,564 in SentinelOne on February 6, 2024 and sell it today you would earn a total of 597.50 from holding SentinelOne or generate 38.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. SentinelOne
Performance |
| Timeline |
| Teradyne |
| SentinelOne |
Teradyne and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and SentinelOne
The main advantage of trading using opposite Teradyne and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne 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 Teradyne 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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