Correlation Between Sentinel Small and Touchstone Mid
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Touchstone Mid 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 Touchstone Mid 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 Touchstone Mid Cap, you can compare the effects of market volatilities on Sentinel Small and Touchstone Mid 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 Touchstone Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Touchstone Mid.
Diversification Opportunities for Sentinel Small and Touchstone Mid
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sentinel and Touchstone is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap 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 Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of Sentinel Small i.e., Sentinel Small and Touchstone Mid go up and down completely randomly.
Pair Corralation between Sentinel Small and Touchstone Mid
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 1.55 times more return on investment than Touchstone Mid. However, Sentinel Small is 1.55 times more volatile than Touchstone Mid Cap. It trades about 0.31 of its potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.32 per unit of risk. If you would invest 617.00 in Sentinel Small Pany on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Sentinel Small Pany or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sentinel Small Pany vs. Touchstone Mid Cap
Performance |
| Timeline |
| Sentinel Small Pany |
| Touchstone Mid Cap |
Sentinel Small and Touchstone Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Touchstone Mid
The main advantage of trading using opposite Sentinel Small and Touchstone Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Touchstone Mid 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 Touchstone Mid will offset losses from the drop in Touchstone Mid'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 |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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