Correlation Between SentinelOne and Invesco Gold

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

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

Diversification Opportunities for SentinelOne and Invesco Gold

-0.79

Correlation Coefficient

SentinelOne  Invesco Gold

Pay attention - limited upside

The 3 months correlation between SentinelOne and Invesco is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Invesco Gold Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Gold Special 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 Invesco Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Gold Special has no effect on the direction of SentinelOne i.e., SentinelOne and Invesco Gold go up and down completely randomly.

Pair Corralation between SentinelOne and Invesco Gold

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.65 times less return on investment than Invesco Gold. In addition to that, SentinelOne is 2.12 times more volatile than Invesco Gold Special. It trades about 0.01 of its total potential returns per unit of risk. Invesco Gold Special is currently generating about 0.05 per unit of volatility. If you would invest  1,870  in Invesco Gold Special on March 2, 2024 and sell it today you would earn a total of  731.00  from holding Invesco Gold Special or generate 39.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

SentinelOne  vs.  Invesco Gold Special

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 July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Invesco Gold Special

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Gold Special are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Invesco Gold

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

The idea behind SentinelOne and Invesco Gold Special 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.