Correlation Between SentinelOne and Tectonic Metals

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

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

Diversification Opportunities for SentinelOne and Tectonic Metals

-0.26

Correlation Coefficient

SentinelOne  Tectonic Metals

Very good diversification

The 3 months correlation between SentinelOne and Tectonic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Tectonic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tectonic Metals 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 Tectonic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tectonic Metals has no effect on the direction of SentinelOne i.e., SentinelOne and Tectonic Metals go up and down completely randomly.

Pair Corralation between SentinelOne and Tectonic Metals

Taking into account the 90-day investment horizon SentinelOne is expected to generate 81.28 times less return on investment than Tectonic Metals. But when comparing it to its historical volatility, SentinelOne is 2.7 times less risky than Tectonic Metals. It trades about 0.01 of its potential returns per unit of risk. Tectonic Metals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Tectonic Metals on May 1, 2025 and sell it today you would earn a total of  34.00  from holding Tectonic Metals or generate 77.27% return on investment over 90 days.

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

SentinelOne  vs.  Tectonic Metals

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.

Tectonic Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tectonic Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tectonic Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Tectonic Metals

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

The idea behind SentinelOne and Tectonic Metals 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.