Correlation Between SentinelOne and Defentect

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

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

Diversification Opportunities for SentinelOne and Defentect

-0.33

Correlation Coefficient

SentinelOne  Defentect

Very good diversification

The 3 months correlation between SentinelOne and Defentect is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Defentect Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defentect Group 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 Defentect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defentect Group has no effect on the direction of SentinelOne i.e., SentinelOne and Defentect go up and down completely randomly.

Pair Corralation between SentinelOne and Defentect

Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.38 times more return on investment than Defentect. However, SentinelOne is 2.66 times less risky than Defentect. It trades about 0.07 of its potential returns per unit of risk. Defentect Group is currently generating about 0.01 per unit of risk. If you would invest  1,636  in SentinelOne on April 22, 2025 and sell it today you would earn a total of  165.00  from holding SentinelOne or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SentinelOne  vs.  Defentect Group

SentinelOne

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SentinelOne may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Defentect Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Defentect Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Defentect is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SentinelOne and Defentect

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

The idea behind SentinelOne and Defentect Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.