Correlation Between Progress Software and SentinelOne

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

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

Diversification Opportunities for Progress Software and SentinelOne

0.29

Correlation Coefficient

Progress Software  SentinelOne

Modest diversification

The 3 months correlation between Progress and SentinelOne is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Progress Software and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Progress Software 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 Progress Software 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 Progress Software i.e., Progress Software and SentinelOne go up and down completely randomly.

Pair Corralation between Progress Software and SentinelOne

Given the investment horizon of 90 days Progress Software is expected to generate 0.64 times more return on investment than SentinelOne. However, Progress Software is 1.56 times less risky than SentinelOne. It trades about 0.13 of its potential returns per unit of risk. SentinelOne is currently generating about -0.02 per unit of risk. If you would invest  5,688  in Progress Software on September 23, 2024 and sell it today you would earn a total of  950.00  from holding Progress Software or generate 16.7% return on investment over 90 days.

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

Progress Software  vs.  SentinelOne

Progress Software

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Progress Software are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Progress Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Progress Software and SentinelOne

The main advantage of trading using opposite Progress Software and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progress Software 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 Progress Software 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.