Correlation Between SentinelOne and Federated Hermes

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

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

Diversification Opportunities for SentinelOne and Federated Hermes

0.28

Correlation Coefficient

SentinelOne  Federated Hermes

Modest diversification

The 3 months correlation between SentinelOne and Federated is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Federated Hermes Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Emerging 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Emerging has no effect on the direction of SentinelOne i.e., SentinelOne and Federated Hermes go up and down completely randomly.

Pair Corralation between SentinelOne and Federated Hermes

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.27 times less return on investment than Federated Hermes. In addition to that, SentinelOne is 2.57 times more volatile than Federated Hermes Emerging. It trades about 0.03 of its total potential returns per unit of risk. Federated Hermes Emerging is currently generating about 0.24 per unit of volatility. If you would invest  1,809  in Federated Hermes Emerging on August 5, 2025 and sell it today you would earn a total of  295.00  from holding Federated Hermes Emerging or generate 16.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

SentinelOne  vs.  Federated Hermes Emerging

SentinelOne

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Federated Hermes Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Hermes Emerging are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Federated Hermes showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Federated Hermes

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

The idea behind SentinelOne and Federated Hermes Emerging 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.