Correlation Between SentinelOne and Voya Emerging

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

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

Diversification Opportunities for SentinelOne and Voya Emerging

0.42

Correlation Coefficient

SentinelOne  Voya Emerging

Very weak diversification

The 3 months correlation between SentinelOne and Voya is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets 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 Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of SentinelOne i.e., SentinelOne and Voya Emerging go up and down completely randomly.

Pair Corralation between SentinelOne and Voya Emerging

Taking into account the 90-day investment horizon SentinelOne is expected to generate 10.37 times less return on investment than Voya Emerging. In addition to that, SentinelOne is 2.2 times more volatile than Voya Emerging Markets. It trades about 0.01 of its total potential returns per unit of risk. Voya Emerging Markets is currently generating about 0.27 per unit of volatility. If you would invest  529.00  in Voya Emerging Markets on July 4, 2024 and sell it today you would earn a total of  36.00  from holding Voya Emerging Markets or generate 6.81% return on investment over 90 days.

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

SentinelOne  vs.  Voya Emerging Markets

SentinelOne

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Voya Emerging Markets

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical indicators, Voya Emerging may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with SentinelOne and Voya Emerging

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

The idea behind SentinelOne and Voya Emerging Markets 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.