Correlation Between Sentinel Small and American Century
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and American Century 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 Small and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Small Pany and American Century Global, you can compare the effects of market volatilities on Sentinel Small and American Century 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 Small with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and American Century.
Diversification Opportunities for Sentinel Small and American Century
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sentinel and American is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and American Century Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Global and Sentinel Small 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 Small Pany are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Global has no effect on the direction of Sentinel Small i.e., Sentinel Small and American Century go up and down completely randomly.
Pair Corralation between Sentinel Small and American Century
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 1.16 times more return on investment than American Century. However, Sentinel Small is 1.16 times more volatile than American Century Global. It trades about 0.1 of its potential returns per unit of risk. American Century Global is currently generating about 0.1 per unit of risk. If you would invest 611.00 in Sentinel Small Pany on September 4, 2024 and sell it today you would earn a total of 169.00 from holding Sentinel Small Pany or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sentinel Small Pany vs. American Century Global
Performance |
| Timeline |
| Sentinel Small Pany |
| American Century Global |
Sentinel Small and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and American Century
The main advantage of trading using opposite Sentinel Small and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Sentinel Small vs. Gmo Resources | Sentinel Small vs. World Energy Fund | Sentinel Small vs. Oil Gas Ultrasector | Sentinel Small vs. Goehring Rozencwajg Resources |
| American Century vs. Mid Cap Value | American Century vs. Equity Growth Fund | American Century vs. Income Growth Fund | American Century vs. Diversified Bond Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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