Correlation Between SentinelOne and Embecta Corp

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

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

Diversification Opportunities for SentinelOne and Embecta Corp

-0.06

Correlation Coefficient

SentinelOne  Embecta Corp

Good diversification

The 3 months correlation between SentinelOne and Embecta is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Embecta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embecta Corp 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 Embecta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embecta Corp has no effect on the direction of SentinelOne i.e., SentinelOne and Embecta Corp go up and down completely randomly.

Pair Corralation between SentinelOne and Embecta Corp

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Embecta Corp. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.49 times less risky than Embecta Corp. The stock trades about -0.06 of its potential returns per unit of risk. The Embecta Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,219  in Embecta Corp on May 21, 2025 and sell it today you would earn a total of  129.00  from holding Embecta Corp or generate 10.58% return on investment over 90 days.

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

SentinelOne  vs.  Embecta Corp

SentinelOne

Risk-Adjusted Performance

Weakest

Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Embecta Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Embecta Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Embecta Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Embecta Corp

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

The idea behind SentinelOne and Embecta Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.