Correlation Between NVIDIA and SentinelOne

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

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

Diversification Opportunities for NVIDIA and SentinelOne

-0.37

Correlation Coefficient

NVIDIA  SentinelOne

Very good diversification

The 3 months correlation between NVIDIA and SentinelOne is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and NVIDIA 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 NVIDIA are associated (or correlated) with SentinelOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SentinelOne has no effect on the direction of NVIDIA i.e., NVIDIA and SentinelOne go up and down completely randomly.

Pair Corralation between NVIDIA and SentinelOne

Given the investment horizon of 90 days NVIDIA is expected to generate 0.68 times more return on investment than SentinelOne. However, NVIDIA is 1.48 times less risky than SentinelOne. It trades about 0.05 of its potential returns per unit of risk. SentinelOne is currently generating about -0.05 per unit of risk. If you would invest  17,674  in NVIDIA on July 27, 2025 and sell it today you would earn a total of  952.00  from holding NVIDIA or generate 5.39% return on investment over 90 days.

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

NVIDIA  vs.  SentinelOne

NVIDIA

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, NVIDIA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with NVIDIA and SentinelOne

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

The idea behind NVIDIA and SentinelOne 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.