Correlation Between SentinelOne and Small Cap

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

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

Diversification Opportunities for SentinelOne and Small Cap

-0.23

Correlation Coefficient

SentinelOne  Small Cap

Very good diversification

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

Pair Corralation between SentinelOne and Small Cap

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Small Cap. In addition to that, SentinelOne is 2.63 times more volatile than Small Cap Core. It trades about -0.07 of its total potential returns per unit of risk. Small Cap Core is currently generating about 0.07 per unit of volatility. If you would invest  1,131  in Small Cap Core on May 10, 2025 and sell it today you would earn a total of  46.00  from holding Small Cap Core or generate 4.07% return on investment over 90 days.

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

SentinelOne  vs.  Small Cap Core

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Small Cap Core

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Core are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Small Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Small Cap

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

The idea behind SentinelOne and Small Cap Core 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.