Correlation Between SentinelOne and Innovator Nasdaq

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

By analyzing existing cross correlation between SentinelOne and Innovator Nasdaq 100 Power, you can compare the effects of market volatilities on SentinelOne and Innovator Nasdaq 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 Innovator Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Innovator Nasdaq.

Diversification Opportunities for SentinelOne and Innovator Nasdaq

-0.46

Correlation Coefficient

SentinelOne  Innovator Nasdaq

Very good diversification

The 3 months correlation between SentinelOne and Innovator is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Innovator Nasdaq 100 Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Nasdaq 100 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 Innovator Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Nasdaq 100 has no effect on the direction of SentinelOne i.e., SentinelOne and Innovator Nasdaq go up and down completely randomly.

Pair Corralation between SentinelOne and Innovator Nasdaq

Taking into account the 90-day investment horizon SentinelOne is expected to generate 5.52 times more return on investment than Innovator Nasdaq. However, SentinelOne is 5.52 times more volatile than Innovator Nasdaq 100 Power. It trades about 0.01 of its potential returns per unit of risk. Innovator Nasdaq 100 Power is currently generating about 0.07 per unit of risk. If you would invest  2,611  in SentinelOne on January 26, 2024 and sell it today you would lose (454.00) from holding SentinelOne or give up 17.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

SentinelOne  vs.  Innovator Nasdaq 100 Power

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 unsteady 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.

Innovator Nasdaq 100

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Nasdaq 100 Power are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Innovator Nasdaq is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SentinelOne and Innovator Nasdaq

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

The idea behind SentinelOne and Innovator Nasdaq 100 Power 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.