Correlation Between Waste Management and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Waste Management 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 Waste Management and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and SentinelOne, you can compare the effects of market volatilities on Waste Management 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 Waste Management with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and SentinelOne.
Diversification Opportunities for Waste Management and SentinelOne
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waste and SentinelOne is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Waste Management 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 Waste Management 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 Waste Management i.e., Waste Management and SentinelOne go up and down completely randomly.
Pair Corralation between Waste Management and SentinelOne
Allowing for the 90-day total investment horizon Waste Management is expected to generate 0.28 times more return on investment than SentinelOne. However, Waste Management is 3.55 times less risky than SentinelOne. It trades about 0.2 of its potential returns per unit of risk. SentinelOne is currently generating about -0.13 per unit of risk. If you would invest 18,759 in Waste Management on February 12, 2024 and sell it today you would earn a total of 2,390 from holding Waste Management or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. SentinelOne
Performance |
| Timeline |
| Waste Management |
| SentinelOne |
Waste Management and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and SentinelOne
The main advantage of trading using opposite Waste Management and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management 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.| Waste Management vs. Clean Harbors | Waste Management vs. Casella Waste Systems | Waste Management vs. Gfl Environmental Holdings | Waste Management vs. Montrose Environmental Grp |
| SentinelOne vs. Datasea | SentinelOne vs. Priority Technology Holdings | SentinelOne vs. Fuse Science | SentinelOne vs. Cemtrex |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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