Correlation Between SentinelOne and Lord Abbett

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

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

Diversification Opportunities for SentinelOne and Lord Abbett

0.29

Correlation Coefficient

SentinelOne  Lord Abbett

Modest diversification

The 3 months correlation between SentinelOne and Lord is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Lord Abbett Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Focused 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Focused has no effect on the direction of SentinelOne i.e., SentinelOne and Lord Abbett go up and down completely randomly.

Pair Corralation between SentinelOne and Lord Abbett

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.14 times more return on investment than Lord Abbett. However, SentinelOne is 3.14 times more volatile than Lord Abbett Focused. It trades about 0.01 of its potential returns per unit of risk. Lord Abbett Focused is currently generating about 0.02 per unit of risk. If you would invest  2,697  in SentinelOne on February 16, 2024 and sell it today you would lose (466.00) from holding SentinelOne or give up 17.28% of portfolio value over 90 days.

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

SentinelOne  vs.  Lord Abbett Focused

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

Lord Abbett Focused

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Focused are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Lord Abbett

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

The idea behind SentinelOne and Lord Abbett Focused 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.