Correlation Between SentinelOne and NXG NextGen

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

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

Diversification Opportunities for SentinelOne and NXG NextGen

0.67

Correlation Coefficient

SentinelOne  NXG NextGen

Poor diversification

The 3 months correlation between SentinelOne and NXG is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of SentinelOne i.e., SentinelOne and NXG NextGen go up and down completely randomly.

Pair Corralation between SentinelOne and NXG NextGen

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the NXG NextGen. In addition to that, SentinelOne is 1.31 times more volatile than NXG NextGen Infrastructure. It trades about -0.1 of its total potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about -0.01 per unit of volatility. If you would invest  4,581  in NXG NextGen Infrastructure on January 26, 2025 and sell it today you would lose (160.00) from holding NXG NextGen Infrastructure or give up 3.49% of portfolio value over 90 days.

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

SentinelOne  vs.  NXG NextGen Infrastructure

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 abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NXG NextGen Infrastr

Risk-Adjusted Performance

Very Weak

Over the last 90 days NXG NextGen Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NXG NextGen is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SentinelOne and NXG NextGen

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

The idea behind SentinelOne and NXG NextGen Infrastructure 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.