Correlation Between SentinelOne and Invesco KBW

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

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

Diversification Opportunities for SentinelOne and Invesco KBW

0.21

Correlation Coefficient

SentinelOne  Invesco KBW

Modest diversification

The 3 months correlation between SentinelOne and Invesco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Invesco KBW High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco KBW High 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 Invesco KBW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco KBW High has no effect on the direction of SentinelOne i.e., SentinelOne and Invesco KBW go up and down completely randomly.

Pair Corralation between SentinelOne and Invesco KBW

Taking into account the 90-day investment horizon SentinelOne is expected to generate 3.55 times more return on investment than Invesco KBW. However, SentinelOne is 3.55 times more volatile than Invesco KBW High. It trades about 0.01 of its potential returns per unit of risk. Invesco KBW High is currently generating about 0.02 per unit of risk. If you would invest  1,828  in SentinelOne on June 29, 2025 and sell it today you would lose (13.00) from holding SentinelOne or give up 0.71% of portfolio value over 90 days.

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

SentinelOne  vs.  Invesco KBW High

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 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.

Invesco KBW High

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco KBW High are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Invesco KBW is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SentinelOne and Invesco KBW

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

The idea behind SentinelOne and Invesco KBW High 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.