Correlation Between Tesla and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and SentinelOne, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and SentinelOne.
Diversification Opportunities for Tesla and SentinelOne
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tesla and SentinelOne is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and SentinelOne go up and down completely randomly.
Pair Corralation between Tesla and SentinelOne
Given the investment horizon of 90 days Tesla is expected to generate 2.49 times less return on investment than SentinelOne. But when comparing it to its historical volatility, Tesla Inc is 1.27 times less risky than SentinelOne. It trades about 0.02 of its potential returns per unit of risk. SentinelOne is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,482 in SentinelOne on January 17, 2024 and sell it today you would earn a total of 607.00 from holding SentinelOne or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. SentinelOne
Performance |
| Timeline |
| Tesla Inc |
| SentinelOne |
Tesla and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and SentinelOne
The main advantage of trading using opposite Tesla and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. Hycroft Mining Holding | Tesla vs. Exela Technologies | Tesla vs. Aquagold International | Tesla vs. Thrivent High Yield |
| SentinelOne vs. Cloudflare | SentinelOne vs. Okta Inc | SentinelOne vs. Adobe Systems Incorporated | SentinelOne vs. Nutanix |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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