Correlation Between SentinelOne and Servotronics

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

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

Diversification Opportunities for SentinelOne and Servotronics

-0.23

Correlation Coefficient

SentinelOne  Servotronics

Very good diversification

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

Pair Corralation between SentinelOne and Servotronics

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Servotronics. But the stock apears to be less risky and, when comparing its historical volatility, SentinelOne is 15.81 times less risky than Servotronics. The stock trades about -0.13 of its potential returns per unit of risk. The Servotronics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,050  in Servotronics on May 14, 2025 and sell it today you would earn a total of  3,644  from holding Servotronics or generate 347.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.38%
Values	Daily Returns

SentinelOne  vs.  Servotronics

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 uncertain 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.

Servotronics

Risk-Adjusted Performance

Good

Over the last 90 days Servotronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady basic indicators, Servotronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Servotronics

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

The idea behind SentinelOne and Servotronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.