Correlation Between Stralem Equity and Sentinel Multi-asset
Can any of the company-specific risk be diversified away by investing in both Stralem Equity and Sentinel Multi-asset 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 Stralem Equity and Sentinel Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stralem Equity Fund and Sentinel Multi Asset Income, you can compare the effects of market volatilities on Stralem Equity and Sentinel Multi-asset 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 Stralem Equity with a short position of Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stralem Equity and Sentinel Multi-asset.
Diversification Opportunities for Stralem Equity and Sentinel Multi-asset
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stralem and Sentinel is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Stralem Equity Fund and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset and Stralem Equity 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 Stralem Equity Fund are associated (or correlated) with Sentinel Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Stralem Equity i.e., Stralem Equity and Sentinel Multi-asset go up and down completely randomly.
Pair Corralation between Stralem Equity and Sentinel Multi-asset
Assuming the 90 days horizon Stralem Equity is expected to generate 1.09 times less return on investment than Sentinel Multi-asset. But when comparing it to its historical volatility, Stralem Equity Fund is 1.83 times less risky than Sentinel Multi-asset. It trades about 0.3 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,972 in Sentinel Multi Asset Income on August 30, 2024 and sell it today you would earn a total of 307.00 from holding Sentinel Multi Asset Income or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stralem Equity Fund vs. Sentinel Multi Asset Income
Performance |
| Timeline |
| Stralem Equity |
| Sentinel Multi Asset |
Stralem Equity and Sentinel Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stralem Equity and Sentinel Multi-asset
The main advantage of trading using opposite Stralem Equity and Sentinel Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stralem Equity position performs unexpectedly, Sentinel Multi-asset 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 Sentinel Multi-asset will offset losses from the drop in Sentinel Multi-asset's long position.| Stralem Equity vs. Teachers Insurance And | Stralem Equity vs. Virtus Real Estate | Stralem Equity vs. Msif Real Estate | Stralem Equity vs. American Century Global |
| Sentinel Multi-asset vs. Invesco Gold Special | Sentinel Multi-asset vs. James Balanced Golden | Sentinel Multi-asset vs. Gold Portfolio Fidelity | Sentinel Multi-asset vs. First Eagle Gold |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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