Correlation Between Touchstone Focused and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Touchstone Focused and Sentinel Small 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 Touchstone Focused and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Focused Fund and Sentinel Small, you can compare the effects of market volatilities on Touchstone Focused and Sentinel Small 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 Touchstone Focused with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Focused and Sentinel Small.
Diversification Opportunities for Touchstone Focused and Sentinel Small
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Touchstone and Sentinel is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Focused Fund and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Touchstone Focused 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 Touchstone Focused Fund are associated (or correlated) with Sentinel Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Small has no effect on the direction of Touchstone Focused i.e., Touchstone Focused and Sentinel Small go up and down completely randomly.
Pair Corralation between Touchstone Focused and Sentinel Small
Assuming the 90 days horizon Touchstone Focused Fund is expected to generate 0.69 times more return on investment than Sentinel Small. However, Touchstone Focused Fund is 1.45 times less risky than Sentinel Small. It trades about 0.09 of its potential returns per unit of risk. Sentinel Small is currently generating about 0.04 per unit of risk. If you would invest 4,943 in Touchstone Focused Fund on November 5, 2024 and sell it today you would earn a total of 1,848 from holding Touchstone Focused Fund or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Focused Fund vs. Sentinel Small
Performance |
| Timeline |
| Touchstone Focused |
| Sentinel Small |
Touchstone Focused and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Focused and Sentinel Small
The main advantage of trading using opposite Touchstone Focused and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Focused position performs unexpectedly, Sentinel Small 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 Small will offset losses from the drop in Sentinel Small's long position.| Touchstone Focused vs. Balanced Strategy Fund | Touchstone Focused vs. Aqr Equity Market | Touchstone Focused vs. Old Westbury Short Term | Touchstone Focused vs. Victory Cemp Market |
| Sentinel Small vs. Jpmorgan Diversified Fund | Sentinel Small vs. Jhancock Diversified Macro | Sentinel Small vs. Federated Hermes Conservative | Sentinel Small vs. Wilmington Diversified Income |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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