Correlation Between SentinelOne and Phathom Pharmaceuticals

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

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

Diversification Opportunities for SentinelOne and Phathom Pharmaceuticals

-0.54

Correlation Coefficient

SentinelOne  Phathom Pharmaceuticals

Excellent diversification

The 3 months correlation between SentinelOne and Phathom is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Phathom Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phathom Pharmaceuticals 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 Phathom Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phathom Pharmaceuticals has no effect on the direction of SentinelOne i.e., SentinelOne and Phathom Pharmaceuticals go up and down completely randomly.

Pair Corralation between SentinelOne and Phathom Pharmaceuticals

Taking into account the 90-day investment horizon SentinelOne is expected to generate 39.33 times less return on investment than Phathom Pharmaceuticals. But when comparing it to its historical volatility, SentinelOne is 5.03 times less risky than Phathom Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Phathom Pharmaceuticals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  336.00  in Phathom Pharmaceuticals on May 1, 2025 and sell it today you would earn a total of  535.00  from holding Phathom Pharmaceuticals or generate 159.23% return on investment over 90 days.

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

SentinelOne  vs.  Phathom Pharmaceuticals

SentinelOne

Risk-Adjusted Performance

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.

Phathom Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Phathom Pharmaceuticals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Phathom Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Phathom Pharmaceuticals

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

The idea behind SentinelOne and Phathom Pharmaceuticals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.