Correlation Between Sentinel Small and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Sentinel Small and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Growth Opportunities.
Diversification Opportunities for Sentinel Small and Growth Opportunities
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sentinel and Growth is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Sentinel Small i.e., Sentinel Small and Growth Opportunities go up and down completely randomly.
Pair Corralation between Sentinel Small and Growth Opportunities
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 1.36 times more return on investment than Growth Opportunities. However, Sentinel Small is 1.36 times more volatile than Growth Opportunities Fund. It trades about 0.2 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.17 per unit of risk. If you would invest 626.00 in Sentinel Small Pany on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Sentinel Small Pany or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Small Pany vs. Growth Opportunities Fund
Performance |
| Timeline |
| Sentinel Small Pany |
| Growth Opportunities |
Sentinel Small and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Growth Opportunities
The main advantage of trading using opposite Sentinel Small and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' 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 |
| Growth Opportunities vs. Small Cap Stock | Growth Opportunities vs. Ab E Opportunities | Growth Opportunities vs. Qs Large Cap | Growth Opportunities vs. Qs Growth 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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