Correlation Between SentinelOne and Multifactor Equity

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

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

Diversification Opportunities for SentinelOne and Multifactor Equity

-0.3

Correlation Coefficient

SentinelOne  Multifactor Equity

Very good diversification

The 3 months correlation between SentinelOne and Multifactor is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Multifactor Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifactor Equity 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 Multifactor Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifactor Equity has no effect on the direction of SentinelOne i.e., SentinelOne and Multifactor Equity go up and down completely randomly.

Pair Corralation between SentinelOne and Multifactor Equity

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.25 times less return on investment than Multifactor Equity. In addition to that, SentinelOne is 3.43 times more volatile than Multifactor Equity Fund. It trades about 0.04 of its total potential returns per unit of risk. Multifactor Equity Fund is currently generating about 0.29 per unit of volatility. If you would invest  1,450  in Multifactor Equity Fund on April 29, 2025 and sell it today you would earn a total of  211.00  from holding Multifactor Equity Fund or generate 14.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SentinelOne  vs.  Multifactor Equity Fund

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Multifactor Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multifactor Equity Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Multifactor Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Multifactor Equity

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

The idea behind SentinelOne and Multifactor Equity 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.