Correlation Between Value Fund and Sentinel Balanced
Can any of the company-specific risk be diversified away by investing in both Value Fund and Sentinel Balanced 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 Value Fund and Sentinel Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Investor and Sentinel Balanced Fund, you can compare the effects of market volatilities on Value Fund and Sentinel Balanced 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 Value Fund with a short position of Sentinel Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Sentinel Balanced.
Diversification Opportunities for Value Fund and Sentinel Balanced
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and Sentinel is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Investor and Sentinel Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Balanced and Value Fund 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 Value Fund Investor are associated (or correlated) with Sentinel Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Balanced has no effect on the direction of Value Fund i.e., Value Fund and Sentinel Balanced go up and down completely randomly.
Pair Corralation between Value Fund and Sentinel Balanced
Assuming the 90 days horizon Value Fund is expected to generate 1.98 times less return on investment than Sentinel Balanced. In addition to that, Value Fund is 1.4 times more volatile than Sentinel Balanced Fund. It trades about 0.04 of its total potential returns per unit of risk. Sentinel Balanced Fund is currently generating about 0.12 per unit of volatility. If you would invest 2,083 in Sentinel Balanced Fund on September 13, 2024 and sell it today you would earn a total of 773.00 from holding Sentinel Balanced Fund or generate 37.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Fund Investor vs. Sentinel Balanced Fund
Performance |
| Timeline |
| Value Fund Investor |
| Sentinel Balanced |
Value Fund and Sentinel Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Sentinel Balanced
The main advantage of trading using opposite Value Fund and Sentinel Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund position performs unexpectedly, Sentinel Balanced 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 Balanced will offset losses from the drop in Sentinel Balanced's long position.| Value Fund vs. International Growth Fund | Value Fund vs. Growth Fund Investor | Value Fund vs. Equity Income Fund | Value Fund vs. Ultra Fund Investor |
| Sentinel Balanced vs. Sentinel Balanced Fund | Sentinel Balanced vs. Sentinel Balanced Fund | Sentinel Balanced vs. Fidelity Worldwide Fund | Sentinel Balanced vs. Guggenheim Total Return |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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