Correlation Between Growth Income and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Growth Income 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 Growth Income and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Income Fund and Sentinel Small Pany, you can compare the effects of market volatilities on Growth Income 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 Growth Income with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Income and Sentinel Small.
Diversification Opportunities for Growth Income and Sentinel Small
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GROWTH and Sentinel is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Growth Income Fund 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 Growth Income 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 Growth Income 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 Pany has no effect on the direction of Growth Income i.e., Growth Income and Sentinel Small go up and down completely randomly.
Pair Corralation between Growth Income and Sentinel Small
Assuming the 90 days horizon Growth Income Fund is expected to generate 0.78 times more return on investment than Sentinel Small. However, Growth Income Fund is 1.28 times less risky than Sentinel Small. It trades about 0.12 of its potential returns per unit of risk. Sentinel Small Pany is currently generating about 0.09 per unit of risk. If you would invest 3,055 in Growth Income Fund on August 24, 2024 and sell it today you would earn a total of 393.00 from holding Growth Income Fund or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Income Fund vs. Sentinel Small Pany
Performance |
| Timeline |
| Growth Income |
| Sentinel Small Pany |
Growth Income and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Income and Sentinel Small
The main advantage of trading using opposite Growth Income and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Income 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.| Growth Income vs. Vanguard Small Cap Index | Growth Income vs. Vanguard Mid Cap Index | Growth Income vs. ABIVAX Socit Anonyme | Growth Income vs. SCOR PK |
| Sentinel Small vs. Aqr Long Short Equity | Sentinel Small vs. Artisan Thematic Fund | Sentinel Small vs. Issachar Fund Class | Sentinel Small vs. Growth Income 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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