Correlation Between SentinelOne and Northern Stock

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

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

Diversification Opportunities for SentinelOne and Northern Stock

-0.23

Correlation Coefficient

SentinelOne  Northern Stock

Very good diversification

The 3 months correlation between SentinelOne and Northern is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Northern Stock Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Stock Index 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 Northern Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Stock Index has no effect on the direction of SentinelOne i.e., SentinelOne and Northern Stock go up and down completely randomly.

Pair Corralation between SentinelOne and Northern Stock

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Northern Stock. In addition to that, SentinelOne is 3.84 times more volatile than Northern Stock Index. It trades about 0.0 of its total potential returns per unit of risk. Northern Stock Index is currently generating about 0.27 per unit of volatility. If you would invest  5,713  in Northern Stock Index on May 3, 2025 and sell it today you would earn a total of  717.00  from holding Northern Stock Index or generate 12.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SentinelOne  vs.  Northern Stock Index

SentinelOne

Risk-Adjusted Performance

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.

Northern Stock Index

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Stock Index are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Northern Stock may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SentinelOne and Northern Stock

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

The idea behind SentinelOne and Northern Stock Index 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.