Correlation Between SentinelOne and Smallcap World

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

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

Diversification Opportunities for SentinelOne and Smallcap World

-0.4

Correlation Coefficient

SentinelOne  Smallcap World

Very good diversification

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

Pair Corralation between SentinelOne and Smallcap World

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Smallcap World. In addition to that, SentinelOne is 4.03 times more volatile than Smallcap World Fund. It trades about -0.06 of its total potential returns per unit of risk. Smallcap World Fund is currently generating about 0.2 per unit of volatility. If you would invest  6,300  in Smallcap World Fund on May 21, 2025 and sell it today you would earn a total of  598.00  from holding Smallcap World Fund or generate 9.49% return on investment over 90 days.

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

SentinelOne  vs.  Smallcap World Fund

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Smallcap World

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap World Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Smallcap World may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SentinelOne and Smallcap World

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

The idea behind SentinelOne and Smallcap World Fund 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.