Correlation Between Endava and Sumo Logic
Can any of the company-specific risk be diversified away by investing in both Endava and Sumo Logic 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 Endava and Sumo Logic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endava and Sumo Logic, you can compare the effects of market volatilities on Endava and Sumo Logic 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 Endava with a short position of Sumo Logic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endava and Sumo Logic.
Diversification Opportunities for Endava and Sumo Logic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Endava and Sumo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Endava and Sumo Logic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumo Logic and Endava 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 Endava are associated (or correlated) with Sumo Logic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumo Logic has no effect on the direction of Endava i.e., Endava and Sumo Logic go up and down completely randomly.
Pair Corralation between Endava and Sumo Logic
Given the investment horizon of 90 days Endava is expected to under-perform the Sumo Logic. But the stock apears to be less risky and, when comparing its historical volatility, Endava is 1.01 times less risky than Sumo Logic. The stock trades about -0.04 of its potential returns per unit of risk. The Sumo Logic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Sumo Logic on September 3, 2024 and sell it today you would earn a total of 344.00 from holding Sumo Logic or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.41% |
| Values | Daily Returns |
Endava vs. Sumo Logic
Performance |
| Timeline |
| Endava |
| Sumo Logic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Endava and Sumo Logic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endava and Sumo Logic
The main advantage of trading using opposite Endava and Sumo Logic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endava position performs unexpectedly, Sumo Logic 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 Sumo Logic will offset losses from the drop in Sumo Logic's long position.| Endava vs. Rapid7 Inc | Endava vs. CyberArk Software | Endava vs. Check Point Software | Endava vs. Tenable Holdings |
| Sumo Logic vs. PagSeguro Digital | Sumo Logic vs. Endava | Sumo Logic vs. Nutanix | Sumo Logic vs. Palo Alto Networks |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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