Correlation Between Sentinel Small and John Hancock
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and John Hancock 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 John Hancock 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 John Hancock Esg, you can compare the effects of market volatilities on Sentinel Small and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and John Hancock.
Diversification Opportunities for Sentinel Small and John Hancock
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sentinel and John is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Esg has no effect on the direction of Sentinel Small i.e., Sentinel Small and John Hancock go up and down completely randomly.
Pair Corralation between Sentinel Small and John Hancock
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 3.81 times more return on investment than John Hancock. However, Sentinel Small is 3.81 times more volatile than John Hancock Esg. It trades about 0.07 of its potential returns per unit of risk. John Hancock Esg is currently generating about 0.06 per unit of risk. If you would invest 551.00 in Sentinel Small Pany on September 12, 2024 and sell it today you would earn a total of 220.00 from holding Sentinel Small Pany or generate 39.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Small Pany vs. John Hancock Esg
Performance |
| Timeline |
| Sentinel Small Pany |
| John Hancock Esg |
Sentinel Small and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and John Hancock
The main advantage of trading using opposite Sentinel Small and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Sentinel Small vs. Dana Large Cap | Sentinel Small vs. Transamerica Large Cap | Sentinel Small vs. Avantis Large Cap | Sentinel Small vs. Qs Large Cap |
| John Hancock vs. Short Real Estate | John Hancock vs. Amg Managers Centersquare | John Hancock vs. Franklin Real Estate | John Hancock vs. Jhancock Real Estate |
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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