Correlation Between SentinelOne and Endava

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

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

Diversification Opportunities for SentinelOne and Endava

-0.43

Correlation Coefficient

SentinelOne  Endava

Very good diversification

The 3 months correlation between SentinelOne and Endava is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Endava in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endava 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 Endava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endava has no effect on the direction of SentinelOne i.e., SentinelOne and Endava go up and down completely randomly.

Pair Corralation between SentinelOne and Endava

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Endava. In addition to that, SentinelOne is 1.2 times more volatile than Endava. It trades about -0.14 of its total potential returns per unit of risk. Endava is currently generating about -0.05 per unit of volatility. If you would invest  2,831  in Endava on November 28, 2024 and sell it today you would lose (227.00) from holding Endava or give up 8.02% of portfolio value over 90 days.

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

SentinelOne  vs.  Endava

SentinelOne

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Endava

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endava has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SentinelOne and Endava

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

The idea behind SentinelOne and Endava 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.