Correlation Between Telos Corp and SentinelOne

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

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

Diversification Opportunities for Telos Corp and SentinelOne

0.33

Correlation Coefficient

Telos Corp  SentinelOne

Weak diversification

The 3 months correlation between Telos and SentinelOne is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Telos Corp and SentinelOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SentinelOne and Telos Corp 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 Telos Corp 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 Telos Corp i.e., Telos Corp and SentinelOne go up and down completely randomly.

Pair Corralation between Telos Corp and SentinelOne

Considering the 90-day investment horizon Telos Corp is expected to generate 1.36 times less return on investment than SentinelOne. In addition to that, Telos Corp is 1.68 times more volatile than SentinelOne. It trades about 0.02 of its total potential returns per unit of risk. SentinelOne is currently generating about 0.05 per unit of volatility. If you would invest  1,563  in SentinelOne on September 3, 2024 and sell it today you would earn a total of  1,180  from holding SentinelOne or generate 75.5% return on investment over 90 days.

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

Telos Corp  vs.  SentinelOne

Telos Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Telos Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SentinelOne

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SentinelOne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telos Corp and SentinelOne

The main advantage of trading using opposite Telos Corp and SentinelOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telos Corp 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 Telos Corp 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.