Correlation Between Sentinel Multi-asset and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Sentinel Multi-asset and Sterling Capital 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 Multi-asset and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Multi Asset Income and Sterling Capital Mid, you can compare the effects of market volatilities on Sentinel Multi-asset and Sterling Capital 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 Multi-asset with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Multi-asset and Sterling Capital.
Diversification Opportunities for Sentinel Multi-asset and Sterling Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sentinel and Sterling is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Multi Asset Income and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Sentinel Multi-asset 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 Multi Asset Income are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Mid has no effect on the direction of Sentinel Multi-asset i.e., Sentinel Multi-asset and Sterling Capital go up and down completely randomly.
Pair Corralation between Sentinel Multi-asset and Sterling Capital
Assuming the 90 days horizon Sentinel Multi Asset Income is expected to generate 1.3 times more return on investment than Sterling Capital. However, Sentinel Multi-asset is 1.3 times more volatile than Sterling Capital Mid. It trades about 0.11 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.09 per unit of risk. If you would invest 4,454 in Sentinel Multi Asset Income on September 1, 2024 and sell it today you would earn a total of 833.00 from holding Sentinel Multi Asset Income or generate 18.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sentinel Multi Asset Income vs. Sterling Capital Mid
Performance |
| Timeline |
| Sentinel Multi Asset |
| Sterling Capital Mid |
Sentinel Multi-asset and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Multi-asset and Sterling Capital
The main advantage of trading using opposite Sentinel Multi-asset and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Multi-asset position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Sentinel Multi-asset vs. Clearbridge Energy Mlp | Sentinel Multi-asset vs. Jennison Natural Resources | Sentinel Multi-asset vs. Short Oil Gas | Sentinel Multi-asset vs. Icon Natural Resources |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |