Correlation Between Sentinelone Inc and Advance Auto

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

Diversification Opportunities for Sentinelone Inc and Advance Auto

0.21
  Correlation Coefficient

Modest diversification

The 2 months correlation between Sentinelone and Advance is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sentinelone Inc Cl and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts and Sentinelone Inc 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 Inc Cl are associated (or correlated) with Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of Sentinelone Inc i.e., Sentinelone Inc and Advance Auto go up and down completely randomly.

Pair Corralation between Sentinelone Inc and Advance Auto

Taking into account the 90-day investment horizon Sentinelone Inc is expected to generate 3.56 times less return on investment than Advance Auto. In addition to that, Sentinelone Inc is 3.07 times more volatile than Advance Auto Parts. It trades about 0.0 of its total potential returns per unit of risk. Advance Auto Parts is currently generating about 0.04 per unit of volatility. If you would invest  13,992  in Advance Auto Parts on April 8, 2022 and sell it today you would earn a total of  4,185  from holding Advance Auto Parts or generate 29.91% return on investment over 90 days.
Time Period2 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy52.72%
ValuesDaily Returns

Sentinelone Inc Cl  vs.  Advance Auto Parts

 Performance (%) 
      Timeline 
Sentinelone Inc 
Sentinelone Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sentinelone Inc Cl are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sentinelone Inc reported solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
2:1
Last Split Date
1999-06-07

Sentinelone Price Channel

Advance Auto Parts 
Advance Performance
0 of 100
Over the last 90 days Advance Auto Parts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.033
Payout Ratio
0.41
Last Split Factor
3:2
Forward Annual Dividend Rate
6.0
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-16
Last Split Date
2005-09-26

Advance Price Channel

Sentinelone Inc and Advance Auto Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Sentinelone Inc and Advance Auto

The main advantage of trading using opposite Sentinelone Inc and Advance Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinelone Inc position performs unexpectedly, Advance Auto 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 Advance Auto will offset losses from the drop in Advance Auto's long position.
The idea behind Sentinelone Inc Cl and Advance Auto Parts 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.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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