Correlation Between Evertec and SentinelOne

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

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

Diversification Opportunities for Evertec and SentinelOne

0.25

Correlation Coefficient

Evertec  SentinelOne

Modest diversification

The 3 months correlation between Evertec and SentinelOne is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Evertec 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 Evertec 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 Evertec i.e., Evertec and SentinelOne go up and down completely randomly.

Pair Corralation between Evertec and SentinelOne

Given the investment horizon of 90 days Evertec is expected to generate 0.47 times more return on investment than SentinelOne. However, Evertec is 2.12 times less risky than SentinelOne. It trades about 0.03 of its potential returns per unit of risk. SentinelOne is currently generating about -0.12 per unit of risk. If you would invest  3,416  in Evertec on October 7, 2024 and sell it today you would earn a total of  46.00  from holding Evertec or generate 1.35% return on investment over 90 days.

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

Evertec  vs.  SentinelOne

Evertec

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SentinelOne

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Evertec and SentinelOne

The main advantage of trading using opposite Evertec and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec 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 Evertec 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.