Correlation Between SentinelOne and Emerging Economies

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

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

Diversification Opportunities for SentinelOne and Emerging Economies

0.08

Correlation Coefficient

SentinelOne  Emerging Economies

Significant diversification

The 3 months correlation between SentinelOne and Emerging is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Emerging Economies Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Economies 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 Emerging Economies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Economies has no effect on the direction of SentinelOne i.e., SentinelOne and Emerging Economies go up and down completely randomly.

Pair Corralation between SentinelOne and Emerging Economies

Taking into account the 90-day investment horizon SentinelOne is expected to generate 1.45 times less return on investment than Emerging Economies. In addition to that, SentinelOne is 3.62 times more volatile than Emerging Economies Fund. It trades about 0.06 of its total potential returns per unit of risk. Emerging Economies Fund is currently generating about 0.29 per unit of volatility. If you would invest  627.00  in Emerging Economies Fund on April 24, 2025 and sell it today you would earn a total of  88.00  from holding Emerging Economies Fund or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SentinelOne  vs.  Emerging Economies Fund

SentinelOne

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SentinelOne may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Emerging Economies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Economies Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Emerging Economies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Emerging Economies

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

The idea behind SentinelOne and Emerging Economies Fund 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.