Correlation Between SentinelOne and EPAM Systems

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

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

Diversification Opportunities for SentinelOne and EPAM Systems

0.35

Correlation Coefficient

SentinelOne  EPAM Systems

Weak diversification

The 3 months correlation between SentinelOne and EPAM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of SentinelOne i.e., SentinelOne and EPAM Systems go up and down completely randomly.

Pair Corralation between SentinelOne and EPAM Systems

Taking into account the 90-day investment horizon SentinelOne is expected to under-perform the EPAM Systems. In addition to that, SentinelOne is 1.11 times more volatile than EPAM Systems. It trades about 0.0 of its total potential returns per unit of risk. EPAM Systems is currently generating about 0.01 per unit of volatility. If you would invest  15,912  in EPAM Systems on May 3, 2025 and sell it today you would lose (141.00) from holding EPAM Systems or give up 0.89% of portfolio value over 90 days.

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

SentinelOne  vs.  EPAM Systems

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 comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EPAM Systems

Risk-Adjusted Performance

Weak

Over the last 90 days EPAM Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EPAM Systems is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SentinelOne and EPAM Systems

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

The idea behind SentinelOne and EPAM Systems 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.