Correlation Between Paymentus Holdings and SentinelOne

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

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

Diversification Opportunities for Paymentus Holdings and SentinelOne

0.78

Correlation Coefficient

Paymentus Holdings  SentinelOne

Poor diversification

The 3 months correlation between Paymentus and SentinelOne is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Paymentus Holdings and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Paymentus Holdings 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 Paymentus Holdings are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Paymentus Holdings i.e., Paymentus Holdings and SentinelOne go up and down completely randomly.

Pair Corralation between Paymentus Holdings and SentinelOne

Considering the 90-day investment horizon Paymentus Holdings is expected to generate 2.48 times more return on investment than SentinelOne. However, Paymentus Holdings is 2.48 times more volatile than SentinelOne. It trades about 0.34 of its potential returns per unit of risk. SentinelOne is currently generating about 0.11 per unit of risk. If you would invest  2,473  in Paymentus Holdings on August 30, 2024 and sell it today you would earn a total of  1,320  from holding Paymentus Holdings or generate 53.38% return on investment over 90 days.

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

Paymentus Holdings  vs.  SentinelOne

Paymentus Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Paymentus Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Paymentus Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

SentinelOne

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 9 (%) 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.

Pair Trading with Paymentus Holdings and SentinelOne

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

The idea behind Paymentus Holdings and SentinelOne 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.