Correlation Between SentinelOne and Applied Finance

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

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

Diversification Opportunities for SentinelOne and Applied Finance

0.28

Correlation Coefficient

SentinelOne  Applied Finance

Modest diversification

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

Pair Corralation between SentinelOne and Applied Finance

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Applied Finance. In addition to that, SentinelOne is 3.98 times more volatile than Applied Finance Core. It trades about -0.02 of its total potential returns per unit of risk. Applied Finance Core is currently generating about 0.0 per unit of volatility. If you would invest  1,204  in Applied Finance Core on August 26, 2025 and sell it today you would lose (3.00) from holding Applied Finance Core or give up 0.25% of portfolio value over 90 days.

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

SentinelOne  vs.  Applied Finance Core

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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Applied Finance Core

Risk-Adjusted Performance

Weakest

Over the last 90 days Applied Finance Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Applied Finance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and Applied Finance

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

The idea behind SentinelOne and Applied Finance Core 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.