Correlation Between SentinelOne and McCormick Company

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

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

Diversification Opportunities for SentinelOne and McCormick Company

-0.82

Correlation Coefficient

SentinelOne  McCormick Company

Pay attention - limited upside

The 3 months correlation between SentinelOne and McCormick is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and McCormick Company Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McCormick rporated 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 McCormick Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McCormick rporated has no effect on the direction of SentinelOne i.e., SentinelOne and McCormick Company go up and down completely randomly.

Pair Corralation between SentinelOne and McCormick Company

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the McCormick Company. In addition to that, SentinelOne is 2.21 times more volatile than McCormick Company Incorporated. It trades about -0.07 of its total potential returns per unit of risk. McCormick Company Incorporated is currently generating about -0.04 per unit of volatility. If you would invest  7,583  in McCormick Company Incorporated on February 3, 2024 and sell it today you would lose (69.00) from holding McCormick Company Incorporated or give up 0.91% of portfolio value over 90 days.

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

SentinelOne  vs.  McCormick Company Incorporated

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.

McCormick rporated

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in McCormick Company Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking signals, McCormick Company exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and McCormick Company

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

The idea behind SentinelOne and McCormick Company Incorporated 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.