Correlation Between SentinelOne and Tile Shop

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

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

Diversification Opportunities for SentinelOne and Tile Shop

-0.28

Correlation Coefficient

SentinelOne  Tile Shop

Very good diversification

The 3 months correlation between SentinelOne and Tile is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Tile Shop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tile Shop Holdings 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 Tile Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tile Shop Holdings has no effect on the direction of SentinelOne i.e., SentinelOne and Tile Shop go up and down completely randomly.

Pair Corralation between SentinelOne and Tile Shop

Taking into account the 90-day investment horizon SentinelOne is expected to generate 22.62 times less return on investment than Tile Shop. But when comparing it to its historical volatility, SentinelOne is 1.18 times less risky than Tile Shop. It trades about 0.01 of its potential returns per unit of risk. Tile Shop Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  558.00  in Tile Shop Holdings on May 1, 2025 and sell it today you would earn a total of  106.00  from holding Tile Shop Holdings or generate 19.0% return on investment over 90 days.

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

SentinelOne  vs.  Tile Shop Holdings

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.

Tile Shop Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tile Shop Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Tile Shop demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Tile Shop

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

The idea behind SentinelOne and Tile Shop Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.