Correlation Between SmileDirectClub and Sentry Petroleum

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

Diversification Opportunities for SmileDirectClub and Sentry Petroleum

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SmileDirectClub and Sentry is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SmileDirectClub and Sentry Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentry Petroleum and SmileDirectClub 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 SmileDirectClub are associated (or correlated) with Sentry Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentry Petroleum has no effect on the direction of SmileDirectClub i.e., SmileDirectClub and Sentry Petroleum go up and down completely randomly.

Pair Corralation between SmileDirectClub and Sentry Petroleum

If you would invest  0.01  in SmileDirectClub on September 2, 2025 and sell it today you would earn a total of  0.00  from holding SmileDirectClub or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

SmileDirectClub  vs.  Sentry Petroleum

 Performance 
       Timeline  
SmileDirectClub 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SmileDirectClub are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental indicators, SmileDirectClub reported solid returns over the last few months and may actually be approaching a breakup point.
Sentry Petroleum 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Sentry Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Sentry Petroleum is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

SmileDirectClub and Sentry Petroleum Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SmileDirectClub and Sentry Petroleum

The main advantage of trading using opposite SmileDirectClub and Sentry Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmileDirectClub position performs unexpectedly, Sentry Petroleum 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 Sentry Petroleum will offset losses from the drop in Sentry Petroleum's long position.
The idea behind SmileDirectClub and Sentry Petroleum 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 Stocks Directory module to find actively traded stocks across global markets.

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