Correlation Between SentinelOne and Insulet

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

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

Diversification Opportunities for SentinelOne and Insulet

0.74

Correlation Coefficient

SentinelOne  Insulet

Poor diversification

The 3 months correlation between SentinelOne and Insulet is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of SentinelOne i.e., SentinelOne and Insulet go up and down completely randomly.

Pair Corralation between SentinelOne and Insulet

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.67 times less return on investment than Insulet. In addition to that, SentinelOne is 1.01 times more volatile than Insulet. It trades about 0.15 of its total potential returns per unit of risk. Insulet is currently generating about 0.25 per unit of volatility. If you would invest  23,561  in Insulet on September 2, 2024 and sell it today you would earn a total of  3,117  from holding Insulet or generate 13.23% return on investment over 90 days.

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

SentinelOne  vs.  Insulet

SentinelOne

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Insulet

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Insulet are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Insulet exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Insulet

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

The idea behind SentinelOne and Insulet 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 CEOs Directory module to screen CEOs from public companies around the world.