Correlation Between SentinelOne and Baron Discovery

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

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

Diversification Opportunities for SentinelOne and Baron Discovery

0.76

Correlation Coefficient

SentinelOne  Baron Discovery

Poor diversification

The 3 months correlation between SentinelOne and Baron is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Baron Discovery Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Discovery 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 Baron Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Discovery has no effect on the direction of SentinelOne i.e., SentinelOne and Baron Discovery go up and down completely randomly.

Pair Corralation between SentinelOne and Baron Discovery

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.32 times more return on investment than Baron Discovery. However, SentinelOne is 2.32 times more volatile than Baron Discovery Fund. It trades about 0.14 of its potential returns per unit of risk. Baron Discovery Fund is currently generating about 0.28 per unit of risk. If you would invest  2,288  in SentinelOne on August 31, 2024 and sell it today you would earn a total of  520.00  from holding SentinelOne or generate 22.73% return on investment over 90 days.

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

SentinelOne  vs.  Baron Discovery Fund

SentinelOne

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 11 (%) 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.

Baron Discovery

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Discovery Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Baron Discovery showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Baron Discovery

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

The idea behind SentinelOne and Baron Discovery Fund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.