Correlation Between SentinelOne and Vapor

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

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

Diversification Opportunities for SentinelOne and Vapor

0.0

Correlation Coefficient

SentinelOne  Vapor

Pay attention - limited upside

The 3 months correlation between SentinelOne and Vapor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Vapor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vapor Group 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 Vapor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vapor Group has no effect on the direction of SentinelOne i.e., SentinelOne and Vapor go up and down completely randomly.

Pair Corralation between SentinelOne and Vapor

Taking into account the 90-day investment horizon SentinelOne is expected to generate 12.13 times less return on investment than Vapor. But when comparing it to its historical volatility, SentinelOne is 15.93 times less risky than Vapor. It trades about 0.07 of its potential returns per unit of risk. Vapor Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Vapor Group on August 31, 2024 and sell it today you would earn a total of  0.01  from holding Vapor Group or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SentinelOne  vs.  Vapor Group

SentinelOne

Risk-Adjusted Performance

10 of 100

Good

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.

Vapor Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vapor Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vapor is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SentinelOne and Vapor

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

The idea behind SentinelOne and Vapor Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.