Correlation Between SentinelOne and Bio Path

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

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

Diversification Opportunities for SentinelOne and Bio Path

0.82

Correlation Coefficient

SentinelOne  Bio Path

Very poor diversification

The 3 months correlation between SentinelOne and Bio is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Bio Path Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Path Holdings and SentinelOne 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 SentinelOne are associated (or correlated) with Bio Path. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Path Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and Bio Path go up and down completely randomly.

Pair Corralation between SentinelOne and Bio Path

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.4 times more return on investment than Bio Path. However, SentinelOne is 2.53 times less risky than Bio Path. It trades about -0.14 of its potential returns per unit of risk. Bio Path Holdings is currently generating about -0.19 per unit of risk. If you would invest  2,817  in SentinelOne on February 29, 2024 and sell it today you would lose (727.00) from holding SentinelOne or give up 25.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

SentinelOne  vs.  Bio Path Holdings

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bio Path Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Path Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SentinelOne and Bio Path

The main advantage of trading using opposite SentinelOne and Bio Path positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Bio Path 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 Bio Path will offset losses from the drop in Bio Path's long position.

The idea behind SentinelOne and Bio Path Holdings 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.

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