Correlation Between SentinelOne and First Community

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

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

Diversification Opportunities for SentinelOne and First Community

0.4

Correlation Coefficient

SentinelOne  First Community

Very weak diversification

The 3 months correlation between SentinelOne and First is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of SentinelOne i.e., SentinelOne and First Community go up and down completely randomly.

Pair Corralation between SentinelOne and First Community

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.71 times less return on investment than First Community. But when comparing it to its historical volatility, SentinelOne is 1.33 times less risky than First Community. It trades about 0.08 of its potential returns per unit of risk. First Community is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  925.00  in First Community on April 20, 2025 and sell it today you would earn a total of  342.00  from holding First Community or generate 36.97% return on investment over 90 days.

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

SentinelOne  vs.  First Community

SentinelOne

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

First Community

Risk-Adjusted Performance

Good

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

Pair Trading with SentinelOne and First Community

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

The idea behind SentinelOne and First Community 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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.