Correlation Between Ab Global and Sentinel Low
Can any of the company-specific risk be diversified away by investing in both Ab Global and Sentinel Low 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 Low 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 Low Duration, you can compare the effects of market volatilities on Ab Global and Sentinel Low 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 Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Sentinel Low.
Diversification Opportunities for Ab Global and Sentinel Low
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CABIX and Sentinel is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Sentinel Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Low Duration 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Low Duration has no effect on the direction of Ab Global i.e., Ab Global and Sentinel Low go up and down completely randomly.
Pair Corralation between Ab Global and Sentinel Low
Assuming the 90 days horizon Ab Global is expected to generate 3.59 times less return on investment than Sentinel Low. In addition to that, Ab Global is 8.01 times more volatile than Sentinel Low Duration. It trades about 0.01 of its total potential returns per unit of risk. Sentinel Low Duration is currently generating about 0.24 per unit of volatility. If you would invest 825.00 in Sentinel Low Duration on November 30, 2024 and sell it today you would earn a total of 99.00 from holding Sentinel Low Duration or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Sentinel Low Duration
Performance |
| Timeline |
| Ab Global Risk |
| Sentinel Low Duration |
Ab Global and Sentinel Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Sentinel Low
The main advantage of trading using opposite Ab Global and Sentinel Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Sentinel Low 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 Low will offset losses from the drop in Sentinel Low's long position.| Ab Global vs. Principal Lifetime Hybrid | Ab Global vs. Washington Mutual Investors | Ab Global vs. Balanced Allocation Fund | Ab Global vs. Enhanced Large Pany |
| Sentinel Low vs. Touchstone Ultra Short | Sentinel Low vs. Doubleline Emerging Markets | Sentinel Low vs. Barings Active Short | Sentinel Low vs. Oklahoma College Savings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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