Correlation Between Sentinel Multi-asset and Stralem Equity
Can any of the company-specific risk be diversified away by investing in both Sentinel Multi-asset and Stralem Equity 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 Stralem Equity 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 Stralem Equity Fund, you can compare the effects of market volatilities on Sentinel Multi-asset and Stralem Equity 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 Stralem Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Multi-asset and Stralem Equity.
Diversification Opportunities for Sentinel Multi-asset and Stralem Equity
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sentinel and Stralem is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Multi Asset Income and Stralem Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stralem Equity 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 Stralem Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stralem Equity has no effect on the direction of Sentinel Multi-asset i.e., Sentinel Multi-asset and Stralem Equity go up and down completely randomly.
Pair Corralation between Sentinel Multi-asset and Stralem Equity
Assuming the 90 days horizon Sentinel Multi Asset Income is expected to generate 1.75 times more return on investment than Stralem Equity. However, Sentinel Multi-asset is 1.75 times more volatile than Stralem Equity Fund. It trades about 0.25 of its potential returns per unit of risk. Stralem Equity Fund is currently generating about 0.35 per unit of risk. If you would invest 4,873 in Sentinel Multi Asset Income on September 1, 2024 and sell it today you would earn a total of 414.00 from holding Sentinel Multi Asset Income or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sentinel Multi Asset Income vs. Stralem Equity Fund
Performance |
| Timeline |
| Sentinel Multi Asset |
| Stralem Equity |
Sentinel Multi-asset and Stralem Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Multi-asset and Stralem Equity
The main advantage of trading using opposite Sentinel Multi-asset and Stralem Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Multi-asset position performs unexpectedly, Stralem Equity 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 Stralem Equity will offset losses from the drop in Stralem Equity'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 |
| Stralem Equity vs. Siit High Yield | Stralem Equity vs. Fidelity Capital Income | Stralem Equity vs. American Century High | Stralem Equity vs. Blackrock High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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