Correlation Between Sentinel Low and Lind Capital
Can any of the company-specific risk be diversified away by investing in both Sentinel Low and Lind Capital 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 Low and Lind Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Low Duration and Lind Capital Partners, you can compare the effects of market volatilities on Sentinel Low and Lind Capital 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 Low with a short position of Lind Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Low and Lind Capital.
Diversification Opportunities for Sentinel Low and Lind Capital
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentinel and Lind is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Low Duration and Lind Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lind Capital Partners and Sentinel Low 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 Low Duration are associated (or correlated) with Lind Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lind Capital Partners has no effect on the direction of Sentinel Low i.e., Sentinel Low and Lind Capital go up and down completely randomly.
Pair Corralation between Sentinel Low and Lind Capital
Assuming the 90 days horizon Sentinel Low is expected to generate 15.38 times less return on investment than Lind Capital. But when comparing it to its historical volatility, Sentinel Low Duration is 2.64 times less risky than Lind Capital. It trades about 0.1 of its potential returns per unit of risk. Lind Capital Partners is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 887.00 in Lind Capital Partners on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Lind Capital Partners or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentinel Low Duration vs. Lind Capital Partners
Performance |
| Timeline |
| Sentinel Low Duration |
| Lind Capital Partners |
Sentinel Low and Lind Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentinel Low and Lind Capital
The main advantage of trading using opposite Sentinel Low and Lind Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Low position performs unexpectedly, Lind Capital 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 Lind Capital will offset losses from the drop in Lind Capital's long position.| Sentinel Low vs. Sentinel Small Pany | Sentinel Low vs. Sentinel Small Pany | Sentinel Low vs. Sentinel Small |
| Lind Capital vs. Blackrock Financial Institutions | Lind Capital vs. Prudential Jennison Financial | Lind Capital vs. John Hancock Financial | Lind Capital vs. 1919 Financial Services |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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