Correlation Between Zealand Pharma and SentinelOne
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma 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 Zealand Pharma and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and SentinelOne, you can compare the effects of market volatilities on Zealand Pharma 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 Zealand Pharma with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and SentinelOne.
Diversification Opportunities for Zealand Pharma and SentinelOne
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zealand and SentinelOne is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Zealand Pharma 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 Zealand Pharma AS 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 Zealand Pharma i.e., Zealand Pharma and SentinelOne go up and down completely randomly.
Pair Corralation between Zealand Pharma and SentinelOne
Assuming the 90 days trading horizon Zealand Pharma AS is expected to under-perform the SentinelOne. In addition to that, Zealand Pharma is 1.01 times more volatile than SentinelOne. It trades about -0.24 of its total potential returns per unit of risk. SentinelOne is currently generating about -0.07 per unit of volatility. If you would invest 2,248 in SentinelOne on January 25, 2024 and sell it today you would lose (91.00) from holding SentinelOne or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Zealand Pharma AS vs. SentinelOne
Performance |
| Timeline |
| Zealand Pharma AS |
| SentinelOne |
Zealand Pharma and SentinelOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and SentinelOne
The main advantage of trading using opposite Zealand Pharma and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma 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.| Zealand Pharma vs. Ambu AS | Zealand Pharma vs. DSV Panalpina AS | Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. GN Store Nord |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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