Correlation Between Sentinel Small and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Mfs Lifetime 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 Mfs Lifetime 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 Mfs Lifetime 2060, you can compare the effects of market volatilities on Sentinel Small and Mfs Lifetime 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 Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Mfs Lifetime.
Diversification Opportunities for Sentinel Small and Mfs Lifetime
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sentinel and Mfs is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Mfs Lifetime 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2060 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 Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2060 has no effect on the direction of Sentinel Small i.e., Sentinel Small and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Sentinel Small and Mfs Lifetime
Assuming the 90 days horizon Sentinel Small Pany is expected to under-perform the Mfs Lifetime. In addition to that, Sentinel Small is 2.08 times more volatile than Mfs Lifetime 2060. It trades about -0.04 of its total potential returns per unit of risk. Mfs Lifetime 2060 is currently generating about 0.12 per unit of volatility. If you would invest 1,724 in Mfs Lifetime 2060 on September 13, 2024 and sell it today you would earn a total of 18.00 from holding Mfs Lifetime 2060 or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sentinel Small Pany vs. Mfs Lifetime 2060
Performance |
| Timeline |
| Sentinel Small Pany |
| Mfs Lifetime 2060 |
Sentinel Small and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Mfs Lifetime
The main advantage of trading using opposite Sentinel Small and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Mfs Lifetime 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 Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.| Sentinel Small vs. Hsbc Treasury Money | Sentinel Small vs. Prudential Government Money | Sentinel Small vs. Aig Government Money | Sentinel Small vs. The Gabelli Money |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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