Correlation Between SentinelOne and Five9

Can any of the company-specific risk be diversified away by investing in both SentinelOne and Five9 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 Five9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SentinelOne and Five9 Inc, you can compare the effects of market volatilities on SentinelOne and Five9 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 Five9. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Five9.

Diversification Opportunities for SentinelOne and Five9

0.17

Correlation Coefficient

SentinelOne  Five9

Average diversification

The 3 months correlation between SentinelOne and Five9 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Five9 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five9 Inc 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 Five9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five9 Inc has no effect on the direction of SentinelOne i.e., SentinelOne and Five9 go up and down completely randomly.

Pair Corralation between SentinelOne and Five9

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the Five9. In addition to that, SentinelOne is 1.23 times more volatile than Five9 Inc. It trades about -0.17 of its total potential returns per unit of risk. Five9 Inc is currently generating about -0.05 per unit of volatility. If you would invest  4,128  in Five9 Inc on November 29, 2024 and sell it today you would lose (354.00) from holding Five9 Inc or give up 8.58% of portfolio value over 90 days.

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

SentinelOne  vs.  Five9 Inc

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.

Five9 Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Five9 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with SentinelOne and Five9

The main advantage of trading using opposite SentinelOne and Five9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, Five9 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 Five9 will offset losses from the drop in Five9's long position.

The idea behind SentinelOne and Five9 Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.