Correlation Between SentinelOne and Samsara

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

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

Diversification Opportunities for SentinelOne and Samsara

0.76

Correlation Coefficient

SentinelOne  Samsara

Poor diversification

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

Pair Corralation between SentinelOne and Samsara

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.53 times less return on investment than Samsara. But when comparing it to its historical volatility, SentinelOne is 1.13 times less risky than Samsara. It trades about 0.14 of its potential returns per unit of risk. Samsara is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,921  in Samsara on September 1, 2024 and sell it today you would earn a total of  1,428  from holding Samsara or generate 36.42% return on investment over 90 days.

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

SentinelOne  vs.  Samsara

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 abnormal basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Samsara

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsara are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsara unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Samsara

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

The idea behind SentinelOne and Samsara 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.