Correlation Between SentinelOne and Meritage

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

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

Diversification Opportunities for SentinelOne and Meritage

0.15

Correlation Coefficient

SentinelOne  Meritage

Average diversification

The 3 months correlation between SentinelOne and Meritage is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Meritage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meritage 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 Meritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage has no effect on the direction of SentinelOne i.e., SentinelOne and Meritage go up and down completely randomly.

Pair Corralation between SentinelOne and Meritage

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.01 times more return on investment than Meritage. However, SentinelOne is 1.01 times more volatile than Meritage. It trades about 0.01 of its potential returns per unit of risk. Meritage is currently generating about 0.01 per unit of risk. If you would invest  1,888  in SentinelOne on May 2, 2025 and sell it today you would lose (8.00) from holding SentinelOne or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SentinelOne  vs.  Meritage

SentinelOne

Risk-Adjusted Performance

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Meritage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meritage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Meritage is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SentinelOne and Meritage

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

The idea behind SentinelOne and Meritage 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.