Correlation Between SentinelOne and K3 Business

Can any of the company-specific risk be diversified away by investing in both SentinelOne and K3 Business 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 K3 Business into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SentinelOne and K3 Business Technology, you can compare the effects of market volatilities on SentinelOne and K3 Business 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 K3 Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and K3 Business.

Diversification Opportunities for SentinelOne and K3 Business

-0.83

Correlation Coefficient

SentinelOne  K3 Business

Pay attention - limited upside

The 3 months correlation between SentinelOne and KBT is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and K3 Business Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K3 Business Technology 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 K3 Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K3 Business Technology has no effect on the direction of SentinelOne i.e., SentinelOne and K3 Business go up and down completely randomly.

Pair Corralation between SentinelOne and K3 Business

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.03 times more return on investment than K3 Business. However, SentinelOne is 2.03 times more volatile than K3 Business Technology. It trades about 0.14 of its potential returns per unit of risk. K3 Business Technology is currently generating about -0.17 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 Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

SentinelOne  vs.  K3 Business Technology

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.

K3 Business Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K3 Business Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SentinelOne and K3 Business

The main advantage of trading using opposite SentinelOne and K3 Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, K3 Business 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 K3 Business will offset losses from the drop in K3 Business' long position.

The idea behind SentinelOne and K3 Business Technology 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.