Correlation Between Crowdstrike Holdings and Endava

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

Diversification Opportunities for Crowdstrike Holdings and Endava

CrowdstrikeEndavaDiversified AwayCrowdstrikeEndavaDiversified Away100%
0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Crowdstrike and Endava is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Endava in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endava and Crowdstrike Holdings 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 Crowdstrike Holdings are associated (or correlated) with Endava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endava has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Endava go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Endava

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.06 times more return on investment than Endava. However, Crowdstrike Holdings is 1.06 times more volatile than Endava. It trades about 0.09 of its potential returns per unit of risk. Endava is currently generating about -0.34 per unit of risk. If you would invest  37,375  in Crowdstrike Holdings on November 27, 2024 and sell it today you would earn a total of  1,797  from holding Crowdstrike Holdings or generate 4.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Crowdstrike Holdings  vs.  Endava

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520253035
JavaScript chart by amCharts 3.21.15CRWD DAVA
       Timeline  
Crowdstrike Holdings 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Crowdstrike Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb340360380400420440460
Endava 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Endava has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2628303234

Crowdstrike Holdings and Endava Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.67-6.49-4.32-2.140.02.254.536.829.1 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15CRWD DAVA
       Returns  

Pair Trading with Crowdstrike Holdings and Endava

The main advantage of trading using opposite Crowdstrike Holdings and Endava positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, Endava 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 Endava will offset losses from the drop in Endava's long position.
The idea behind Crowdstrike Holdings and Endava 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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