Correlation Between Sentinel Multi and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Sentinel Multi and Investec Emerging 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 and Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Sentinel Multi and Investec Emerging 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 with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Multi and Investec Emerging.
Diversification Opportunities for Sentinel Multi and Investec Emerging
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sentinel and Investec is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Multi Asset Income and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Sentinel Multi 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Sentinel Multi i.e., Sentinel Multi and Investec Emerging go up and down completely randomly.
Pair Corralation between Sentinel Multi and Investec Emerging
Assuming the 90 days horizon Sentinel Multi Asset Income is expected to under-perform the Investec Emerging. In addition to that, Sentinel Multi is 2.37 times more volatile than Investec Emerging Markets. It trades about -0.03 of its total potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.06 per unit of volatility. If you would invest 928.00 in Investec Emerging Markets on September 14, 2024 and sell it today you would earn a total of 144.00 from holding Investec Emerging Markets or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Multi Asset Income vs. Investec Emerging Markets
Performance |
| Timeline |
| Sentinel Multi Asset |
| Investec Emerging Markets |
Sentinel Multi and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Multi and Investec Emerging
The main advantage of trading using opposite Sentinel Multi and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Multi position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Sentinel Multi vs. Balanced Fund Retail | Sentinel Multi vs. Cutler Equity | Sentinel Multi vs. Rbc Global Equity | Sentinel Multi vs. Dreyfusnewton International Equity |
| Investec Emerging vs. Rbc Emerging Markets | Investec Emerging vs. Locorr Market Trend | Investec Emerging vs. Calvert Developed Market | Investec Emerging vs. Ab All 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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