Correlation Between SentinelOne and IShares IBoxx

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

By analyzing existing cross correlation between SentinelOne and iShares iBoxx Investment, you can compare the effects of market volatilities on SentinelOne and IShares IBoxx 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 IShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and IShares IBoxx.

Diversification Opportunities for SentinelOne and IShares IBoxx

0.46

Correlation Coefficient

SentinelOne  IShares IBoxx

Very weak diversification

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

Pair Corralation between SentinelOne and IShares IBoxx

Taking into account the 90-day investment horizon SentinelOne is expected to generate 6.53 times more return on investment than IShares IBoxx. However, SentinelOne is 6.53 times more volatile than iShares iBoxx Investment. It trades about 0.03 of its potential returns per unit of risk. iShares iBoxx Investment is currently generating about 0.01 per unit of risk. If you would invest  1,964  in SentinelOne on January 31, 2024 and sell it today you would earn a total of  206.00  from holding SentinelOne or generate 10.49% return on investment over 90 days.

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

SentinelOne  vs.  iShares iBoxx Investment

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

iShares iBoxx Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares iBoxx Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares IBoxx is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SentinelOne and IShares IBoxx

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

The idea behind SentinelOne and iShares iBoxx Investment 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.