Correlation Between SentinelOne and Vanguard Small

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

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

Diversification Opportunities for SentinelOne and Vanguard Small

-0.17

Correlation Coefficient

SentinelOne  Vanguard Small

Good diversification

The 3 months correlation between SentinelOne and Vanguard is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Vanguard Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of SentinelOne i.e., SentinelOne and Vanguard Small go up and down completely randomly.

Pair Corralation between SentinelOne and Vanguard Small

Taking into account the 90-day investment horizon SentinelOne is expected to generate 15.91 times less return on investment than Vanguard Small. In addition to that, SentinelOne is 2.56 times more volatile than Vanguard Small Cap Growth. It trades about 0.01 of its total potential returns per unit of risk. Vanguard Small Cap Growth is currently generating about 0.22 per unit of volatility. If you would invest  24,935  in Vanguard Small Cap Growth on May 1, 2025 and sell it today you would earn a total of  3,760  from holding Vanguard Small Cap Growth or generate 15.08% return on investment over 90 days.

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

SentinelOne  vs.  Vanguard Small Cap Growth

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.

Vanguard Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Growth are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental drivers, Vanguard Small disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Vanguard Small

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

The idea behind SentinelOne and Vanguard Small Cap Growth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.