Correlation Between SentinelOne and Gen Digital

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

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

Diversification Opportunities for SentinelOne and Gen Digital

-0.05

Correlation Coefficient

SentinelOne  Gen Digital

Good diversification

The 3 months correlation between SentinelOne and Gen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Gen Digital Contingent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital Contingent 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital Contingent has no effect on the direction of SentinelOne i.e., SentinelOne and Gen Digital go up and down completely randomly.

Pair Corralation between SentinelOne and Gen Digital

Taking into account the 90-day investment horizon SentinelOne is expected to generate 20.2 times less return on investment than Gen Digital. But when comparing it to its historical volatility, SentinelOne is 2.31 times less risky than Gen Digital. It trades about 0.02 of its potential returns per unit of risk. Gen Digital Contingent is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  526.00  in Gen Digital Contingent on May 1, 2025 and sell it today you would earn a total of  424.00  from holding Gen Digital Contingent or generate 80.61% return on investment over 90 days.

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

SentinelOne  vs.  Gen Digital Contingent

SentinelOne

Risk-Adjusted Performance

Very 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.

Gen Digital Contingent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gen Digital Contingent are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gen Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Gen Digital

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

The idea behind SentinelOne and Gen Digital Contingent 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.