Correlation Between Sentinel Small and Touchstone Focused
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Touchstone Focused 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 Focused 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 Focused Fund, you can compare the effects of market volatilities on Sentinel Small and Touchstone Focused 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 Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Touchstone Focused.
Diversification Opportunities for Sentinel Small and Touchstone Focused
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentinel and Touchstone is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused 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 Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Focused has no effect on the direction of Sentinel Small i.e., Sentinel Small and Touchstone Focused go up and down completely randomly.
Pair Corralation between Sentinel Small and Touchstone Focused
Assuming the 90 days horizon Sentinel Small is expected to generate 1.57 times less return on investment than Touchstone Focused. In addition to that, Sentinel Small is 1.44 times more volatile than Touchstone Focused Fund. It trades about 0.04 of its total potential returns per unit of risk. Touchstone Focused Fund is currently generating about 0.09 per unit of volatility. If you would invest 4,943 in Touchstone Focused Fund on November 5, 2024 and sell it today you would earn a total of 1,848 from holding Touchstone Focused Fund or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Small Pany vs. Touchstone Focused Fund
Performance |
| Timeline |
| Sentinel Small Pany |
| Touchstone Focused |
Sentinel Small and Touchstone Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Touchstone Focused
The main advantage of trading using opposite Sentinel Small and Touchstone Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Touchstone Focused 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 Focused will offset losses from the drop in Touchstone Focused'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 |
| Touchstone Focused vs. Balanced Strategy Fund | Touchstone Focused vs. Aqr Equity Market | Touchstone Focused vs. Old Westbury Short Term | Touchstone Focused vs. Victory Cemp Market |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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