Correlation Between Best Buy and SentinelOne

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Can any of the company-specific risk be diversified away by investing in both Best Buy and SentinelOne 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 Best Buy and SentinelOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Best Buy Co and SentinelOne, you can compare the effects of market volatilities on Best Buy and SentinelOne 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 Best Buy with a short position of SentinelOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and SentinelOne.

Diversification Opportunities for Best Buy and SentinelOne

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Best and SentinelOne is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Best Buy 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 Best Buy Co are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Best Buy i.e., Best Buy and SentinelOne go up and down completely randomly.

Pair Corralation between Best Buy and SentinelOne

Considering the 90-day investment horizon Best Buy Co is expected to generate 0.38 times more return on investment than SentinelOne. However, Best Buy Co is 2.61 times less risky than SentinelOne. It trades about 0.12 of its potential returns per unit of risk. SentinelOne is currently generating about -0.17 per unit of risk. If you would invest  7,872  in Best Buy Co on December 30, 2023 and sell it today you would earn a total of  331.00  from holding Best Buy Co or generate 4.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Best Buy Co  vs.  SentinelOne

 Performance 
       Timeline  
Best Buy 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Best Buy may actually be approaching a critical reversion point that can send shares even higher in April 2024.
SentinelOne 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Best Buy and SentinelOne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Best Buy and SentinelOne

The main advantage of trading using opposite Best Buy and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Best Buy position performs unexpectedly, SentinelOne 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 SentinelOne will offset losses from the drop in SentinelOne's long position.
The idea behind Best Buy Co and SentinelOne 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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