Correlation Between College Retirement and Sentinel Multi-asset

Can any of the company-specific risk be diversified away by investing in both College Retirement and Sentinel Multi-asset 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 College Retirement and Sentinel Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between College Retirement Equities and Sentinel Multi Asset Income, you can compare the effects of market volatilities on College Retirement and Sentinel Multi-asset 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 College Retirement with a short position of Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Sentinel Multi-asset.

Diversification Opportunities for College Retirement and Sentinel Multi-asset

0.09

Correlation Coefficient

College Retirement  Sentinel Multi-asset

Significant diversification

The 3 months correlation between College and Sentinel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities 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 College Retirement 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 College Retirement Equities are associated (or correlated) with Sentinel Multi-asset. 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 College Retirement i.e., College Retirement and Sentinel Multi-asset go up and down completely randomly.

Pair Corralation between College Retirement and Sentinel Multi-asset

Assuming the 90 days trading horizon College Retirement is expected to generate 2.59 times less return on investment than Sentinel Multi-asset. But when comparing it to its historical volatility, College Retirement Equities is 1.19 times less risky than Sentinel Multi-asset. It trades about 0.1 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,968  in Sentinel Multi Asset Income on October 25, 2024 and sell it today you would earn a total of  160.00  from holding Sentinel Multi Asset Income or generate 4.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

College Retirement Equities  vs.  Sentinel Multi Asset Income

College Retirement

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in College Retirement Equities are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, College Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sentinel Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentinel Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with College Retirement and Sentinel Multi-asset

The main advantage of trading using opposite College Retirement and Sentinel Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Sentinel Multi-asset 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-asset will offset losses from the drop in Sentinel Multi-asset's long position.

The idea behind College Retirement Equities and Sentinel Multi Asset Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.