Correlation Between SentinelOne and Aqr Global

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

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

Diversification Opportunities for SentinelOne and Aqr Global

-0.69

Correlation Coefficient

SentinelOne  Aqr Global

Excellent diversification

The 3 months correlation between SentinelOne and Aqr is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Aqr Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Equity 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 Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Equity has no effect on the direction of SentinelOne i.e., SentinelOne and Aqr Global go up and down completely randomly.

Pair Corralation between SentinelOne and Aqr Global

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.78 times more return on investment than Aqr Global. However, SentinelOne is 2.78 times more volatile than Aqr Global Equity. It trades about 0.19 of its potential returns per unit of risk. Aqr Global Equity is currently generating about 0.47 per unit of risk. If you would invest  2,047  in SentinelOne on February 21, 2024 and sell it today you would earn a total of  142.00  from holding SentinelOne or generate 6.94% return on investment over 90 days.

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

SentinelOne  vs.  Aqr Global Equity

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Aqr Global Equity

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Global Equity are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with SentinelOne and Aqr Global

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

The idea behind SentinelOne and Aqr Global Equity 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.