Correlation Between SentinelOne and Shimano

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

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

Diversification Opportunities for SentinelOne and Shimano

-0.81

Correlation Coefficient

SentinelOne  Shimano

Pay attention - limited upside

The 3 months correlation between SentinelOne and Shimano is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of SentinelOne i.e., SentinelOne and Shimano go up and down completely randomly.

Pair Corralation between SentinelOne and Shimano

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Shimano. In addition to that, SentinelOne is 2.03 times more volatile than Shimano Inc ADR. It trades about -0.13 of its total potential returns per unit of risk. Shimano Inc ADR is currently generating about 0.28 per unit of volatility. If you would invest  1,357  in Shimano Inc ADR on February 3, 2024 and sell it today you would earn a total of  305.00  from holding Shimano Inc ADR or generate 22.48% return on investment over 90 days.

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

SentinelOne  vs.  Shimano Inc ADR

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.

Shimano Inc ADR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shimano Inc ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Shimano showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Shimano

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

The idea behind SentinelOne and Shimano Inc ADR 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.