Correlation Between Touchstone Small and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Touchstone Small 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 Small 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 Small Cap and Sentinel Small Pany, you can compare the effects of market volatilities on Touchstone Small 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 Small with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Sentinel Small.
Diversification Opportunities for Touchstone Small and Sentinel Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Sentinel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Sentinel Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small Pany and Touchstone 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 Touchstone Small Cap 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 Pany has no effect on the direction of Touchstone Small i.e., Touchstone Small and Sentinel Small go up and down completely randomly.
Pair Corralation between Touchstone Small and Sentinel Small
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.08 times more return on investment than Sentinel Small. However, Touchstone Small is 1.08 times more volatile than Sentinel Small Pany. It trades about 0.25 of its potential returns per unit of risk. Sentinel Small Pany is currently generating about 0.22 per unit of risk. If you would invest 3,845 in Touchstone Small Cap on August 30, 2024 and sell it today you would earn a total of 324.00 from holding Touchstone Small Cap or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Touchstone Small Cap vs. Sentinel Small Pany
Performance |
| Timeline |
| Touchstone Small Cap |
| Sentinel Small Pany |
Touchstone Small and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Sentinel Small
The main advantage of trading using opposite Touchstone Small and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small 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 Small vs. Touchstone Sands Capital | Touchstone Small vs. Mid Cap Growth | Touchstone Small vs. Mid Cap Growth | Touchstone Small vs. Mid Cap Growth |
| Sentinel Small vs. Sentinel Mon Stock | Sentinel Small vs. Sentinel International Equity | Sentinel Small vs. Sentinel Balanced Fund | Sentinel Small vs. Calamos Growth Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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