Correlation Between Sentinel Balanced and Simt Large
Can any of the company-specific risk be diversified away by investing in both Sentinel Balanced and Simt 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 Simt 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 Simt Large Cap, you can compare the effects of market volatilities on Sentinel Balanced and Simt 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 Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Balanced and Simt Large.
Diversification Opportunities for Sentinel Balanced and Simt Large
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sentinel and Simt is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Balanced Fund and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt 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 Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Sentinel Balanced i.e., Sentinel Balanced and Simt Large go up and down completely randomly.
Pair Corralation between Sentinel Balanced and Simt Large
Assuming the 90 days horizon Sentinel Balanced is expected to generate 1.3 times less return on investment than Simt Large. But when comparing it to its historical volatility, Sentinel Balanced Fund is 2.37 times less risky than Simt Large. It trades about 0.11 of its potential returns per unit of risk. Simt Large Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,721 in Simt Large Cap on August 30, 2024 and sell it today you would earn a total of 1,531 from holding Simt Large Cap or generate 41.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Balanced Fund vs. Simt Large Cap
Performance |
| Timeline |
| Sentinel Balanced |
| Simt Large Cap |
Sentinel Balanced and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Balanced and Simt Large
The main advantage of trading using opposite Sentinel Balanced and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Balanced position performs unexpectedly, Simt 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 Simt Large will offset losses from the drop in Simt Large's long position.| Sentinel Balanced vs. American Balanced Fund | Sentinel Balanced vs. American Balanced Fund | Sentinel Balanced vs. HUMANA INC | Sentinel Balanced vs. Aquagold International |
| Simt Large vs. Growth Fund Of | Simt Large vs. HUMANA INC | Simt Large vs. Aquagold International | Simt Large vs. Barloworld Ltd ADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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