Correlation Between SentinelOne and Sandbox

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

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

Diversification Opportunities for SentinelOne and Sandbox

0.38

Correlation Coefficient

SentinelOne  Sandbox

Weak diversification

The 3 months correlation between SentinelOne and Sandbox is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and The Sandbox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandbox 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 Sandbox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandbox has no effect on the direction of SentinelOne i.e., SentinelOne and Sandbox go up and down completely randomly.

Pair Corralation between SentinelOne and Sandbox

Taking into account the 90-day investment horizon SentinelOne is expected to generate 5.44 times less return on investment than Sandbox. But when comparing it to its historical volatility, SentinelOne is 3.16 times less risky than Sandbox. It trades about 0.12 of its potential returns per unit of risk. The Sandbox is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  25.00  in The Sandbox on August 30, 2024 and sell it today you would earn a total of  36.00  from holding The Sandbox or generate 144.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SentinelOne  vs.  The Sandbox

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.

Sandbox

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Sandbox are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sandbox exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Sandbox

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

The idea behind SentinelOne and The Sandbox 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.