Correlation Between Sentinel Small and Payden Gnma
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Payden Gnma 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 Payden Gnma 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 Payden Gnma Fund, you can compare the effects of market volatilities on Sentinel Small and Payden Gnma 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 Payden Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Payden Gnma.
Diversification Opportunities for Sentinel Small and Payden Gnma
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sentinel and Payden is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Payden Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Gnma Fund 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 Payden Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Gnma Fund has no effect on the direction of Sentinel Small i.e., Sentinel Small and Payden Gnma go up and down completely randomly.
Pair Corralation between Sentinel Small and Payden Gnma
Assuming the 90 days horizon Sentinel Small Pany is expected to generate 2.57 times more return on investment than Payden Gnma. However, Sentinel Small is 2.57 times more volatile than Payden Gnma Fund. It trades about 0.12 of its potential returns per unit of risk. Payden Gnma Fund is currently generating about 0.08 per unit of risk. If you would invest 567.00 in Sentinel Small Pany on September 1, 2024 and sell it today you would earn a total of 211.00 from holding Sentinel Small Pany or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Sentinel Small Pany vs. Payden Gnma Fund
Performance |
| Timeline |
| Sentinel Small Pany |
| Payden Gnma Fund |
Sentinel Small and Payden Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Payden Gnma
The main advantage of trading using opposite Sentinel Small and Payden Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Payden Gnma 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 Payden Gnma will offset losses from the drop in Payden Gnma's long position.| Sentinel Small vs. Touchstone Small Cap | Sentinel Small vs. Touchstone Sands Capital | Sentinel Small vs. Mid Cap Growth | Sentinel Small vs. Mid Cap Growth |
| Payden Gnma vs. Payden Porate Bond | Payden Gnma vs. Payden Absolute Return | Payden Gnma vs. Payden Absolute Return | Payden Gnma vs. Payden Emerging Markets |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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