Correlation Between Paysafe and SentinelOne

Can any of the company-specific risk be diversified away by investing in both Paysafe 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 Paysafe and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paysafe and SentinelOne, you can compare the effects of market volatilities on Paysafe 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 Paysafe with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and SentinelOne.

Diversification Opportunities for Paysafe and SentinelOne

-0.49

Correlation Coefficient

Paysafe  SentinelOne

Very good diversification

The 3 months correlation between Paysafe and SentinelOne is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Paysafe 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 Paysafe 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 Paysafe i.e., Paysafe and SentinelOne go up and down completely randomly.

Pair Corralation between Paysafe and SentinelOne

Given the investment horizon of 90 days Paysafe is expected to generate 1.28 times more return on investment than SentinelOne. However, Paysafe is 1.28 times more volatile than SentinelOne. It trades about 0.12 of its potential returns per unit of risk. SentinelOne is currently generating about -0.25 per unit of risk. If you would invest  1,422  in Paysafe on January 16, 2024 and sell it today you would earn a total of  86.00  from holding Paysafe or generate 6.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Paysafe  vs.  SentinelOne

Paysafe

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paysafe are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Paysafe exhibited solid returns over the last few months and may actually be approaching a breakup point.

SentinelOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Paysafe and SentinelOne

The main advantage of trading using opposite Paysafe and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe 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 Paysafe 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.