Correlation Between SentinelOne and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both SentinelOne and Meta Platforms 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 Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Meta Platforms, you can compare the effects of market volatilities on SentinelOne and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Meta Platforms.
Diversification Opportunities for SentinelOne and Meta Platforms
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SentinelOne and Meta is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of SentinelOne i.e., SentinelOne and Meta Platforms go up and down completely randomly.
Pair Corralation between SentinelOne and Meta Platforms
If you would invest 16,949 in Meta Platforms on December 30, 2023 and sell it today you would earn a total of 0.00 from holding Meta Platforms or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
SentinelOne vs. Meta Platforms
Performance |
Timeline |
SentinelOne |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
SentinelOne and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SentinelOne and Meta Platforms
The main advantage of trading using opposite SentinelOne and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.SentinelOne vs. Catalent | SentinelOne vs. Cytek Biosciences | SentinelOne vs. Amgen Inc | SentinelOne vs. HUTCHMED DRC |
Meta Platforms vs. Amgen Inc | Meta Platforms vs. Apogee Enterprises | Meta Platforms vs. Simpson Manufacturing | Meta Platforms vs. Western Digital |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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