Correlation Between SentinelOne and ADT

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and ADT 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 ADT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and ADT Inc, you can compare the effects of market volatilities on SentinelOne and ADT 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 ADT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and ADT.

Diversification Opportunities for SentinelOne and ADT

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between SentinelOne and ADT is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and ADT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADT 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 ADT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADT Inc has no effect on the direction of SentinelOne i.e., SentinelOne and ADT go up and down completely randomly.

Pair Corralation between SentinelOne and ADT

Taking into account the 90-day investment horizon SentinelOne is expected to generate 2.09 times less return on investment than ADT. In addition to that, SentinelOne is 1.91 times more volatile than ADT Inc. It trades about 0.01 of its total potential returns per unit of risk. ADT Inc is currently generating about 0.04 per unit of volatility. If you would invest  810.00  in ADT Inc on May 2, 2025 and sell it today you would earn a total of  26.00  from holding ADT Inc or generate 3.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SentinelOne  vs.  ADT Inc

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
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 latest stock price uproar, may contribute to short-horizon losses for the private investors.
ADT Inc 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ADT Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, ADT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SentinelOne and ADT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and ADT

The main advantage of trading using opposite SentinelOne and ADT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, ADT 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 ADT will offset losses from the drop in ADT's long position.
The idea behind SentinelOne and ADT 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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