Correlation Between Sentinel Small and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Fidelity Freedom 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 Fidelity Freedom 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 Fidelity Freedom Index, you can compare the effects of market volatilities on Sentinel Small and Fidelity Freedom 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 Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Fidelity Freedom.
Diversification Opportunities for Sentinel Small and Fidelity Freedom
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sentinel and Fidelity is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index 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 Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Index has no effect on the direction of Sentinel Small i.e., Sentinel Small and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Sentinel Small and Fidelity Freedom
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 5.54 times more return on investment than Fidelity Freedom. However, Sentinel Small is 5.54 times more volatile than Fidelity Freedom Index. It trades about 0.24 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.09 per unit of risk. If you would invest 723.00 in Sentinel Small Pany on August 29, 2024 and sell it today you would earn a total of 57.00 from holding Sentinel Small Pany or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Small Pany vs. Fidelity Freedom Index
Performance |
| Timeline |
| Sentinel Small Pany |
| Fidelity Freedom Index |
Sentinel Small and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Fidelity Freedom
The main advantage of trading using opposite Sentinel Small and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.| Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index | Sentinel Small vs. Vanguard Small Cap Index |
| Fidelity Freedom vs. The Gabelli Small | Fidelity Freedom vs. Sentinel Small Pany | Fidelity Freedom vs. Massmutual Premier Diversified | Fidelity Freedom vs. Huber Capital Diversified |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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