Correlation Between Swatch Group and SentinelOne

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

Diversification Opportunities for Swatch Group and SentinelOne

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Swatch and SentinelOne is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Swatch Group AG and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Swatch Group 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 Swatch Group AG are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of Swatch Group i.e., Swatch Group and SentinelOne go up and down completely randomly.

Pair Corralation between Swatch Group and SentinelOne

Assuming the 90 days horizon Swatch Group AG is expected to generate 0.56 times more return on investment than SentinelOne. However, Swatch Group AG is 1.8 times less risky than SentinelOne. It trades about 0.16 of its potential returns per unit of risk. SentinelOne is currently generating about -0.26 per unit of risk. If you would invest  1,158  in Swatch Group AG on September 2, 2022 and sell it today you would earn a total of  128.00  from holding Swatch Group AG or generate 11.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Swatch Group AG  vs.  SentinelOne

 Performance (%) 
       Timeline  
Swatch Group AG 
Swatch Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Swatch Group AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Swatch Group showed solid returns over the last few months and may actually be approaching a breakup point.

Swatch Price Channel

SentinelOne 
SentinelOne Performance
0 of 100
Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

SentinelOne Price Channel

Swatch Group and SentinelOne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Swatch Group and SentinelOne

The main advantage of trading using opposite Swatch Group and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swatch Group position performs unexpectedly, SentinelOne 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 will offset losses from the drop in SentinelOne's long position.
Swatch Group vs. Meta Materials
The idea behind Swatch Group AG and SentinelOne 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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