Correlation Between SentinelOne and AB Ultra

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

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

Diversification Opportunities for SentinelOne and AB Ultra

0.65

Correlation Coefficient

SentinelOne  AB Ultra

Poor diversification

The 3 months correlation between SentinelOne and YEAR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and AB Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Ultra Short 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 AB Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Ultra Short has no effect on the direction of SentinelOne i.e., SentinelOne and AB Ultra go up and down completely randomly.

Pair Corralation between SentinelOne and AB Ultra

Taking into account the 90-day investment horizon SentinelOne is expected to generate 37.31 times more return on investment than AB Ultra. However, SentinelOne is 37.31 times more volatile than AB Ultra Short. It trades about 0.12 of its potential returns per unit of risk. AB Ultra Short is currently generating about 0.23 per unit of risk. If you would invest  2,356  in SentinelOne on August 30, 2024 and sell it today you would earn a total of  452.00  from holding SentinelOne or generate 19.19% return on investment over 90 days.

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

SentinelOne  vs.  AB Ultra Short

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.

AB Ultra Short

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AB Ultra Short are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, AB Ultra is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SentinelOne and AB Ultra

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

The idea behind SentinelOne and AB Ultra Short 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 Global Correlations module to find global opportunities by holding instruments from different markets.