Correlation Between Sentinel Small and Sp Midcap
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Sp Midcap 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 Sentinel Small and Sp Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Small Pany and Sp Midcap Index, you can compare the effects of market volatilities on Sentinel Small and Sp Midcap 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 Sentinel Small with a short position of Sp Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Sp Midcap.
Diversification Opportunities for Sentinel Small and Sp Midcap
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentinel and SPMIX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Sp Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Midcap Index and Sentinel Small 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 Sentinel Small Pany are associated (or correlated) with Sp Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Midcap Index has no effect on the direction of Sentinel Small i.e., Sentinel Small and Sp Midcap go up and down completely randomly.
Pair Corralation between Sentinel Small and Sp Midcap
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 0.44 times more return on investment than Sp Midcap. However, Sentinel Small Pany is 2.25 times less risky than Sp Midcap. It trades about -0.04 of its potential returns per unit of risk. Sp Midcap Index is currently generating about -0.18 per unit of risk. If you would invest 672.00 in Sentinel Small Pany on September 13, 2024 and sell it today you would lose (6.00) from holding Sentinel Small Pany or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Small Pany vs. Sp Midcap Index
Performance |
| Timeline |
| Sentinel Small Pany |
| Sp Midcap Index |
Sentinel Small and Sp Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Sp Midcap
The main advantage of trading using opposite Sentinel Small and Sp Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Sp Midcap 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 Sp Midcap will offset losses from the drop in Sp Midcap's long position.| Sentinel Small vs. Sentinel Mon Stock | Sentinel Small vs. Sentinel International Equity | Sentinel Small vs. Sentinel Balanced Fund | Sentinel Small vs. Calamos Growth Fund |
| Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Funds | Sp Midcap vs. Nasdaq 100 Index Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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