Correlation Between California Bond and Sentinel Multi
Can any of the company-specific risk be diversified away by investing in both California Bond and Sentinel Multi 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 California Bond and Sentinel Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Sentinel Multi Asset Income, you can compare the effects of market volatilities on California Bond and Sentinel Multi 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 California Bond with a short position of Sentinel Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Sentinel Multi.
Diversification Opportunities for California Bond and Sentinel Multi
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between California and Sentinel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding California Bond 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 California Bond 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 California Bond Fund are associated (or correlated) with Sentinel Multi. 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 California Bond i.e., California Bond and Sentinel Multi go up and down completely randomly.
Pair Corralation between California Bond and Sentinel Multi
Assuming the 90 days horizon California Bond Fund is expected to generate 0.13 times more return on investment than Sentinel Multi. However, California Bond Fund is 7.69 times less risky than Sentinel Multi. It trades about 0.44 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about -0.17 per unit of risk. If you would invest 1,041 in California Bond Fund on September 13, 2024 and sell it today you would earn a total of 10.00 from holding California Bond Fund or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Sentinel Multi Asset Income
Performance |
| Timeline |
| California Bond |
| Sentinel Multi Asset |
California Bond and Sentinel Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Sentinel Multi
The main advantage of trading using opposite California Bond and Sentinel Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Sentinel Multi 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 will offset losses from the drop in Sentinel Multi's long position.| California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Victory Diversified Stock | California Bond vs. Intermediate Term Bond Fund |
| Sentinel Multi vs. Investec Emerging Markets | Sentinel Multi vs. Ashmore Emerging Markets | Sentinel Multi vs. Rbc Emerging Markets | Sentinel Multi vs. Pnc Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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