Correlation Between SentinelOne and ALM Equity

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

By analyzing existing cross correlation between SentinelOne and ALM Equity AB, you can compare the effects of market volatilities on SentinelOne and ALM Equity 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 ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and ALM Equity.

Diversification Opportunities for SentinelOne and ALM Equity

-0.32

Correlation Coefficient

SentinelOne  ALM Equity

Very good diversification

The 3 months correlation between SentinelOne and ALM is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB 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 ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of SentinelOne i.e., SentinelOne and ALM Equity go up and down completely randomly.

Pair Corralation between SentinelOne and ALM Equity

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the ALM Equity. In addition to that, SentinelOne is 4.76 times more volatile than ALM Equity AB. It trades about -0.07 of its total potential returns per unit of risk. ALM Equity AB is currently generating about 0.18 per unit of volatility. If you would invest  7,845  in ALM Equity AB on May 22, 2025 and sell it today you would earn a total of  555.00  from holding ALM Equity AB or generate 7.07% return on investment over 90 days.

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

SentinelOne  vs.  ALM Equity AB

SentinelOne

Risk-Adjusted Performance

Weakest

Over the last 90 days SentinelOne 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 comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ALM Equity AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALM Equity AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ALM Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SentinelOne and ALM Equity

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

The idea behind SentinelOne and ALM Equity AB 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.