Correlation Between SentinelOne and Splunk

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

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

Diversification Opportunities for SentinelOne and Splunk

0.0

Correlation Coefficient

SentinelOne  Splunk

Pay attention - limited upside

The 3 months correlation between SentinelOne and Splunk is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Splunk Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Splunk 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 Splunk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Splunk Inc has no effect on the direction of SentinelOne i.e., SentinelOne and Splunk go up and down completely randomly.

Pair Corralation between SentinelOne and Splunk

If you would invest (100.00) in Splunk Inc on December 3, 2024 and sell it today you would earn a total of  100.00  from holding Splunk Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

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

Splunk Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Splunk Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Splunk is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SentinelOne and Splunk

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

The idea behind SentinelOne and Splunk 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.