Correlation Between Sentinel Small and Prudential Health
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Prudential Health 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 Prudential Health 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 Prudential Health Sciences, you can compare the effects of market volatilities on Sentinel Small and Prudential Health 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 Prudential Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Prudential Health.
Diversification Opportunities for Sentinel Small and Prudential Health
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentinel and Prudential is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Prudential Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Health 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 Prudential Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Health has no effect on the direction of Sentinel Small i.e., Sentinel Small and Prudential Health go up and down completely randomly.
Pair Corralation between Sentinel Small and Prudential Health
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 1.22 times more return on investment than Prudential Health. However, Sentinel Small is 1.22 times more volatile than Prudential Health Sciences. It trades about 0.22 of its potential returns per unit of risk. Prudential Health Sciences is currently generating about -0.13 per unit of risk. If you would invest 723.00 in Sentinel Small Pany on August 27, 2024 and sell it today you would earn a total of 48.00 from holding Sentinel Small Pany or generate 6.64% 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. Prudential Health Sciences
Performance |
| Timeline |
| Sentinel Small Pany |
| Prudential Health |
Sentinel Small and Prudential Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Prudential Health
The main advantage of trading using opposite Sentinel Small and Prudential Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Prudential Health 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 Prudential Health will offset losses from the drop in Prudential Health's long position.| Sentinel Small vs. Vy Blackrock Inflation | Sentinel Small vs. Ab Municipal Bond | Sentinel Small vs. Arrow Managed Futures | Sentinel Small vs. Aqr Managed Futures |
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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 Stocks Directory module to find actively traded stocks across global markets.
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