Correlation Between Ab Global and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Ab Global and Sentinel Small 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 Ab Global and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Sentinel Small, you can compare the effects of market volatilities on Ab Global and Sentinel Small 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 Ab Global with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Sentinel Small.
Diversification Opportunities for Ab Global and Sentinel Small
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CABIX and Sentinel is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Ab Global 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 Ab Global Risk are associated (or correlated) with Sentinel Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Small has no effect on the direction of Ab Global i.e., Ab Global and Sentinel Small go up and down completely randomly.
Pair Corralation between Ab Global and Sentinel Small
Assuming the 90 days horizon Ab Global Risk is expected to generate 0.19 times more return on investment than Sentinel Small. However, Ab Global Risk is 5.36 times less risky than Sentinel Small. It trades about 0.48 of its potential returns per unit of risk. Sentinel Small is currently generating about -0.19 per unit of risk. If you would invest 1,767 in Ab Global Risk on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Ab Global Risk or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Sentinel Small
Performance |
| Timeline |
| Ab Global Risk |
| Sentinel Small |
Ab Global and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Sentinel Small
The main advantage of trading using opposite Ab Global and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Sentinel Small 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 Sentinel Small will offset losses from the drop in Sentinel Small's long position.| Ab Global vs. Elfun Government Money | Ab Global vs. Franklin Government Money | Ab Global vs. Money Market Obligations | Ab Global vs. Blackrock Exchange Portfolio |
| Sentinel Small vs. Touchstone Small Cap | Sentinel Small vs. Touchstone Sands Capital | Sentinel Small vs. Mid Cap Growth | Sentinel Small vs. Mid Cap Growth |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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