Correlation Between SentinelOne and Confluent

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

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

Diversification Opportunities for SentinelOne and Confluent

-0.19

Correlation Coefficient

SentinelOne  Confluent

Good diversification

The 3 months correlation between SentinelOne and Confluent is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent 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 Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of SentinelOne i.e., SentinelOne and Confluent go up and down completely randomly.

Pair Corralation between SentinelOne and Confluent

Taking into account the 90-day investment horizon SentinelOne is expected to generate 11.88 times less return on investment than Confluent. In addition to that, SentinelOne is 1.24 times more volatile than Confluent. It trades about 0.02 of its total potential returns per unit of risk. Confluent is currently generating about 0.26 per unit of volatility. If you would invest  1,944  in Confluent on May 1, 2025 and sell it today you would earn a total of  753.00  from holding Confluent or generate 38.73% return on investment over 90 days.

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

SentinelOne  vs.  Confluent

SentinelOne

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Confluent

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Confluent are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Confluent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Confluent

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

The idea behind SentinelOne and Confluent 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.