Correlation Between Thornburg International and Sentinel Common
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Sentinel Common 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 Thornburg International and Sentinel Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg International Value and Sentinel Mon Stock, you can compare the effects of market volatilities on Thornburg International and Sentinel Common 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 Thornburg International with a short position of Sentinel Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Sentinel Common.
Diversification Opportunities for Thornburg International and Sentinel Common
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thornburg and Sentinel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Sentinel Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Mon Stock and Thornburg International 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 Thornburg International Value are associated (or correlated) with Sentinel Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Mon Stock has no effect on the direction of Thornburg International i.e., Thornburg International and Sentinel Common go up and down completely randomly.
Pair Corralation between Thornburg International and Sentinel Common
Assuming the 90 days horizon Thornburg International Value is expected to generate 1.16 times more return on investment than Sentinel Common. However, Thornburg International is 1.16 times more volatile than Sentinel Mon Stock. It trades about 0.18 of its potential returns per unit of risk. Sentinel Mon Stock is currently generating about -0.03 per unit of risk. If you would invest 2,727 in Thornburg International Value on November 27, 2024 and sell it today you would earn a total of 73.00 from holding Thornburg International Value or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg International Value vs. Sentinel Mon Stock
Performance |
| Timeline |
| Thornburg International |
| Sentinel Mon Stock |
Thornburg International and Sentinel Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Sentinel Common
The main advantage of trading using opposite Thornburg International and Sentinel Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Sentinel Common 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 Common will offset losses from the drop in Sentinel Common's long position.| Thornburg International vs. Thornburg E Growth | Thornburg International vs. Mainstay Large Cap | Thornburg International vs. Allianzgi Nfj Small Cap | Thornburg International vs. Columbia Mid Cap |
| Sentinel Common vs. Invesco Disciplined Equity | Sentinel Common vs. Sentinel Mon Stock | Sentinel Common vs. Sentinel Mon Stock | Sentinel Common vs. T Rowe Price |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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