Correlation Between SentinelOne and Fabrinet

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

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

Diversification Opportunities for SentinelOne and Fabrinet

0.37

Correlation Coefficient

SentinelOne  Fabrinet

Weak diversification

The 3 months correlation between SentinelOne and Fabrinet is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet 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 Fabrinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabrinet has no effect on the direction of SentinelOne i.e., SentinelOne and Fabrinet go up and down completely randomly.

Pair Corralation between SentinelOne and Fabrinet

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Fabrinet. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 1.22 times less risky than Fabrinet. The stock trades about -0.04 of its potential returns per unit of risk. The Fabrinet is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  23,133  in Fabrinet on March 23, 2025 and sell it today you would earn a total of  3,424  from holding Fabrinet or generate 14.8% return on investment over 90 days.

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

SentinelOne  vs.  Fabrinet

SentinelOne

Risk-Adjusted Performance

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 latest abnormal 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.

Fabrinet

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fabrinet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Fabrinet

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

The idea behind SentinelOne and Fabrinet 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.