Correlation Between Sentinel Small and Gabelli Utilities
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Gabelli Utilities 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 Gabelli Utilities 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 The Gabelli Utilities, you can compare the effects of market volatilities on Sentinel Small and Gabelli Utilities 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 Gabelli Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Gabelli Utilities.
Diversification Opportunities for Sentinel Small and Gabelli Utilities
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sentinel and Gabelli is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and The Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities 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 Gabelli Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utilities has no effect on the direction of Sentinel Small i.e., Sentinel Small and Gabelli Utilities go up and down completely randomly.
Pair Corralation between Sentinel Small and Gabelli Utilities
Assuming the 90 days horizon Sentinel Small Pany is expected to under-perform the Gabelli Utilities. In addition to that, Sentinel Small is 1.85 times more volatile than The Gabelli Utilities. It trades about -0.16 of its total potential returns per unit of risk. The Gabelli Utilities is currently generating about -0.12 per unit of volatility. If you would invest 613.00 in The Gabelli Utilities on September 14, 2024 and sell it today you would lose (11.00) from holding The Gabelli Utilities or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sentinel Small Pany vs. The Gabelli Utilities
Performance |
| Timeline |
| Sentinel Small Pany |
| Gabelli Utilities |
Sentinel Small and Gabelli Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Gabelli Utilities
The main advantage of trading using opposite Sentinel Small and Gabelli Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Gabelli Utilities 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 Gabelli Utilities will offset losses from the drop in Gabelli Utilities' long position.| Sentinel Small vs. William Blair Small | Sentinel Small vs. Great West Loomis Sayles | Sentinel Small vs. Lsv Small Cap | Sentinel Small vs. Amg River Road |
| Gabelli Utilities vs. Dominion Energy | Gabelli Utilities vs. Atlantica Sustainable Infrastructure | Gabelli Utilities vs. Consolidated Edison | Gabelli Utilities vs. Eversource Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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