Correlation Between Sentinel Small and Henderson Strategic
Can any of the company-specific risk be diversified away by investing in both Sentinel Small and Henderson Strategic 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 Henderson Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Small and Henderson Strategic Income, you can compare the effects of market volatilities on Sentinel Small and Henderson Strategic 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 Henderson Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Henderson Strategic.
Diversification Opportunities for Sentinel Small and Henderson Strategic
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentinel and Henderson is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small and Henderson Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Strategic 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 are associated (or correlated) with Henderson Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Strategic has no effect on the direction of Sentinel Small i.e., Sentinel Small and Henderson Strategic go up and down completely randomly.
Pair Corralation between Sentinel Small and Henderson Strategic
Assuming the 90 days horizon Sentinel Small is expected to generate 2.38 times more return on investment than Henderson Strategic. However, Sentinel Small is 2.38 times more volatile than Henderson Strategic Income. It trades about 0.07 of its potential returns per unit of risk. Henderson Strategic Income is currently generating about 0.03 per unit of risk. If you would invest 508.00 in Sentinel Small on September 5, 2024 and sell it today you would earn a total of 204.00 from holding Sentinel Small or generate 40.16% 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 vs. Henderson Strategic Income
Performance |
| Timeline |
| Sentinel Small |
| Henderson Strategic |
Sentinel Small and Henderson Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Small and Henderson Strategic
The main advantage of trading using opposite Sentinel Small and Henderson Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Small position performs unexpectedly, Henderson Strategic 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 Henderson Strategic will offset losses from the drop in Henderson Strategic'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 |
| Henderson Strategic vs. T Rowe Price | Henderson Strategic vs. Brown Advisory Sustainable | Henderson Strategic vs. T Rowe Price | Henderson Strategic vs. Sentinel Small |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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