Correlation Between Hermes Intl and Sentinelone Inc

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Can any of the company-specific risk be diversified away by investing in both Hermes Intl and Sentinelone Inc 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 Hermes Intl and Sentinelone Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes Intl SA and Sentinelone Inc Cl, you can compare the effects of market volatilities on Hermes Intl and Sentinelone Inc 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 Hermes Intl with a short position of Sentinelone Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes Intl and Sentinelone Inc.

Diversification Opportunities for Hermes Intl and Sentinelone Inc

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Hermes and Sentinelone is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hermes Intl SA and Sentinelone Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinelone Inc and Hermes Intl 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 Hermes Intl SA are associated (or correlated) with Sentinelone Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinelone Inc has no effect on the direction of Hermes Intl i.e., Hermes Intl and Sentinelone Inc go up and down completely randomly.

Pair Corralation between Hermes Intl and Sentinelone Inc

Assuming the 90 days horizon Hermes Intl SA is expected to generate 0.64 times more return on investment than Sentinelone Inc. However, Hermes Intl SA is 1.55 times less risky than Sentinelone Inc. It trades about 0.04 of its potential returns per unit of risk. Sentinelone Inc Cl is currently generating about -0.01 per unit of risk. If you would invest  99,879  in Hermes Intl SA on August 29, 2022 and sell it today you would earn a total of  54,446  from holding Hermes Intl SA or generate 54.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy72.55%
ValuesDaily Returns

Hermes Intl SA  vs.  Sentinelone Inc Cl

 Performance (%) 
       Timeline  
Hermes Intl SA 
Hermes Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hermes Intl SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Hermes Intl exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hermes Price Channel

Sentinelone Inc 
Sentinelone Performance
0 of 100
Over the last 90 days Sentinelone Inc Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sentinelone Price Channel

Hermes Intl and Sentinelone Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hermes Intl and Sentinelone Inc

The main advantage of trading using opposite Hermes Intl and Sentinelone Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes Intl position performs unexpectedly, Sentinelone Inc 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 Sentinelone Inc will offset losses from the drop in Sentinelone Inc's long position.
Hermes Intl vs. Hermes Intl SA
The idea behind Hermes Intl SA and Sentinelone Inc Cl 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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Check out your portfolio center. 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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