Correlation Between SentinelOne and LEO Token

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

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

Diversification Opportunities for SentinelOne and LEO Token

-0.27

Correlation Coefficient

SentinelOne  LEO Token

Very good diversification

The 3 months correlation between SentinelOne and LEO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and LEO Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEO Token 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 LEO Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEO Token has no effect on the direction of SentinelOne i.e., SentinelOne and LEO Token go up and down completely randomly.

Pair Corralation between SentinelOne and LEO Token

Taking into account the 90-day investment horizon SentinelOne is expected to generate 4.28 times more return on investment than LEO Token. However, SentinelOne is 4.28 times more volatile than LEO Token. It trades about 0.07 of its potential returns per unit of risk. LEO Token is currently generating about -0.03 per unit of risk. If you would invest  1,818  in SentinelOne on May 2, 2025 and sell it today you would earn a total of  62.00  from holding SentinelOne or generate 3.41% return on investment over 90 days.

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

SentinelOne  vs.  LEO Token

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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

LEO Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days LEO Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, LEO Token is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SentinelOne and LEO Token

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

The idea behind SentinelOne and LEO Token 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.