Correlation Between SentinelOne and Sandvik AB

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

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

Diversification Opportunities for SentinelOne and Sandvik AB

0.01

Correlation Coefficient

SentinelOne  Sandvik AB

Significant diversification

The 3 months correlation between SentinelOne and Sandvik is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Sandvik AB ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandvik AB ADR 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 Sandvik AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandvik AB ADR has no effect on the direction of SentinelOne i.e., SentinelOne and Sandvik AB go up and down completely randomly.

Pair Corralation between SentinelOne and Sandvik AB

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Sandvik AB. In addition to that, SentinelOne is 1.79 times more volatile than Sandvik AB ADR. It trades about 0.0 of its total potential returns per unit of risk. Sandvik AB ADR is currently generating about 0.18 per unit of volatility. If you would invest  2,098  in Sandvik AB ADR on May 3, 2025 and sell it today you would earn a total of  371.00  from holding Sandvik AB ADR or generate 17.68% return on investment over 90 days.

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

SentinelOne  vs.  Sandvik AB ADR

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.

Sandvik AB ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sandvik AB ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Sandvik AB showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Sandvik AB

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

The idea behind SentinelOne and Sandvik AB ADR 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.