Correlation Between SentinelOne and WixCom

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

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

Diversification Opportunities for SentinelOne and WixCom

0.3

Correlation Coefficient

SentinelOne  WixCom

Weak diversification

The 3 months correlation between SentinelOne and WixCom is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and WixCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WixCom 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 WixCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WixCom has no effect on the direction of SentinelOne i.e., SentinelOne and WixCom go up and down completely randomly.

Pair Corralation between SentinelOne and WixCom

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the WixCom. In addition to that, SentinelOne is 1.73 times more volatile than WixCom. It trades about -0.22 of its total potential returns per unit of risk. WixCom is currently generating about 0.08 per unit of volatility. If you would invest  21,027  in WixCom on September 21, 2024 and sell it today you would earn a total of  716.00  from holding WixCom or generate 3.41% return on investment over 90 days.

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

SentinelOne  vs.  WixCom

SentinelOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

WixCom

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WixCom are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, WixCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and WixCom

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

The idea behind SentinelOne and WixCom 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.