Correlation Between Calvert High and Sentinel Multi
Can any of the company-specific risk be diversified away by investing in both Calvert High and Sentinel Multi 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 Calvert High and Sentinel Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert High Yield and Sentinel Multi Asset Income, you can compare the effects of market volatilities on Calvert High and Sentinel Multi 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 Calvert High with a short position of Sentinel Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert High and Sentinel Multi.
Diversification Opportunities for Calvert High and Sentinel Multi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Sentinel is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset and Calvert High 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 Calvert High Yield are associated (or correlated) with Sentinel Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Calvert High i.e., Calvert High and Sentinel Multi go up and down completely randomly.
Pair Corralation between Calvert High and Sentinel Multi
Assuming the 90 days horizon Calvert High Yield is expected to generate 0.14 times more return on investment than Sentinel Multi. However, Calvert High Yield is 6.98 times less risky than Sentinel Multi. It trades about 0.1 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about -0.18 per unit of risk. If you would invest 2,498 in Calvert High Yield on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Calvert High Yield or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert High Yield vs. Sentinel Multi Asset Income
Performance |
| Timeline |
| Calvert High Yield |
| Sentinel Multi Asset |
Calvert High and Sentinel Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert High and Sentinel Multi
The main advantage of trading using opposite Calvert High and Sentinel Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert High position performs unexpectedly, Sentinel Multi 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 Multi will offset losses from the drop in Sentinel Multi's long position.| Calvert High vs. Locorr Dynamic Equity | Calvert High vs. Balanced Fund Retail | Calvert High vs. Us Strategic Equity | Calvert High vs. Gmo Global Equity |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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