Correlation Between SentinelOne and Small-cap Value

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

By analyzing existing cross correlation between SentinelOne and Small Cap Value Series, you can compare the effects of market volatilities on SentinelOne and Small-cap Value 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 Small-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Small-cap Value.

Diversification Opportunities for SentinelOne and Small-cap Value

0.81

Correlation Coefficient

SentinelOne  Small-cap Value

Very poor diversification

The 3 months correlation between SentinelOne and Small-cap is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Small Cap Value Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of SentinelOne i.e., SentinelOne and Small-cap Value go up and down completely randomly.

Pair Corralation between SentinelOne and Small-cap Value

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Small-cap Value. In addition to that, SentinelOne is 1.47 times more volatile than Small Cap Value Series. It trades about -0.14 of its total potential returns per unit of risk. Small Cap Value Series is currently generating about -0.19 per unit of volatility. If you would invest  1,578  in Small Cap Value Series on October 8, 2024 and sell it today you would lose (248.00) from holding Small Cap Value Series or give up 15.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

SentinelOne  vs.  Small Cap Value Series

SentinelOne

Risk-Adjusted Performance

0 of 100

Very 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.

Small Cap Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Small Cap Value Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with SentinelOne and Small-cap Value

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

The idea behind SentinelOne and Small Cap Value Series 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.