Correlation Between Vipshop Holdings and SentinelOne

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

Diversification Opportunities for Vipshop Holdings and SentinelOne

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Vipshop and SentinelOne is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Vipshop Holdings 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 Vipshop Holdings Limited 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 Vipshop Holdings i.e., Vipshop Holdings and SentinelOne go up and down completely randomly.

Pair Corralation between Vipshop Holdings and SentinelOne

Given the investment horizon of 90 days Vipshop Holdings Limited is expected to generate 0.73 times more return on investment than SentinelOne. However, Vipshop Holdings Limited is 1.38 times less risky than SentinelOne. It trades about 0.06 of its potential returns per unit of risk. SentinelOne is currently generating about 0.01 per unit of risk. If you would invest  790.00  in Vipshop Holdings Limited on December 30, 2023 and sell it today you would earn a total of  865.00  from holding Vipshop Holdings Limited or generate 109.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Vipshop Holdings Limited  vs.  SentinelOne

 Performance 
       Timeline  
Vipshop Holdings 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Vipshop Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vipshop Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Vipshop Holdings and SentinelOne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vipshop Holdings and SentinelOne

The main advantage of trading using opposite Vipshop Holdings and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings 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 Vipshop Holdings Limited 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.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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