Correlation Between SentinelOne and Xerox Corp

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

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

Diversification Opportunities for SentinelOne and Xerox Corp

0.39

Correlation Coefficient

SentinelOne  Xerox Corp

Weak diversification

The 3 months correlation between SentinelOne and Xerox is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Xerox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox Corp 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 Xerox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox Corp has no effect on the direction of SentinelOne i.e., SentinelOne and Xerox Corp go up and down completely randomly.

Pair Corralation between SentinelOne and Xerox Corp

Taking into account the 90-day investment horizon SentinelOne is expected to generate 5.25 times less return on investment than Xerox Corp. But when comparing it to its historical volatility, SentinelOne is 1.72 times less risky than Xerox Corp. It trades about 0.06 of its potential returns per unit of risk. Xerox Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  414.00  in Xerox Corp on April 24, 2025 and sell it today you would earn a total of  251.00  from holding Xerox Corp or generate 60.63% return on investment over 90 days.

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

SentinelOne  vs.  Xerox Corp

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 uncertain basic indicators, SentinelOne may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Xerox Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xerox Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Xerox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and Xerox Corp

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

The idea behind SentinelOne and Xerox Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.