Correlation Between Sentinel Balanced and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Sentinel Balanced and Touchstone Large 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 Balanced and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Balanced Fund and Touchstone Large Cap, you can compare the effects of market volatilities on Sentinel Balanced and Touchstone Large 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 Balanced with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Balanced and Touchstone Large.
Diversification Opportunities for Sentinel Balanced and Touchstone Large
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sentinel and Touchstone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Balanced Fund and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and Sentinel Balanced 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 Balanced Fund are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Sentinel Balanced i.e., Sentinel Balanced and Touchstone Large go up and down completely randomly.
Pair Corralation between Sentinel Balanced and Touchstone Large
Assuming the 90 days horizon Sentinel Balanced Fund is expected to generate 0.63 times more return on investment than Touchstone Large. However, Sentinel Balanced Fund is 1.59 times less risky than Touchstone Large. It trades about -0.25 of its potential returns per unit of risk. Touchstone Large Cap is currently generating about -0.37 per unit of risk. If you would invest 2,889 in Sentinel Balanced Fund on October 10, 2024 and sell it today you would lose (87.00) from holding Sentinel Balanced Fund or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Balanced Fund vs. Touchstone Large Cap
Performance |
| Timeline |
| Sentinel Balanced |
| Touchstone Large Cap |
Sentinel Balanced and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Balanced and Touchstone Large
The main advantage of trading using opposite Sentinel Balanced and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Balanced position performs unexpectedly, Touchstone Large 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 Large will offset losses from the drop in Touchstone Large's long position.| Sentinel Balanced vs. Sentinel Balanced Fund | Sentinel Balanced vs. Sentinel Balanced Fund | Sentinel Balanced vs. Fidelity Worldwide Fund | Sentinel Balanced vs. Franklin Growth Allocation |
| Touchstone Large vs. Artisan Global Opportunities | Touchstone Large vs. Asg Global Alternatives | Touchstone Large vs. Wisdomtree Siegel Global | Touchstone Large vs. Ab Global Bond |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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