Correlation Between Sentinel Multi-asset and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Sentinel Multi-asset and Sterling Capital 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 Sentinel Multi-asset and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentinel Multi Asset Income and Sterling Capital Stratton, you can compare the effects of market volatilities on Sentinel Multi-asset and Sterling Capital 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 Sentinel Multi-asset with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Multi-asset and Sterling Capital.
Diversification Opportunities for Sentinel Multi-asset and Sterling Capital
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sentinel and Sterling is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Multi Asset Income and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Sentinel Multi-asset 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 Sentinel Multi Asset Income are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Stratton has no effect on the direction of Sentinel Multi-asset i.e., Sentinel Multi-asset and Sterling Capital go up and down completely randomly.
Pair Corralation between Sentinel Multi-asset and Sterling Capital
Assuming the 90 days horizon Sentinel Multi Asset Income is expected to under-perform the Sterling Capital. In addition to that, Sentinel Multi-asset is 1.1 times more volatile than Sterling Capital Stratton. It trades about -0.06 of its total potential returns per unit of risk. Sterling Capital Stratton is currently generating about -0.05 per unit of volatility. If you would invest 5,450 in Sterling Capital Stratton on December 29, 2024 and sell it today you would lose (187.00) from holding Sterling Capital Stratton or give up 3.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sentinel Multi Asset Income vs. Sterling Capital Stratton
Performance |
Timeline |
Sentinel Multi Asset |
Sterling Capital Stratton |
Sentinel Multi-asset and Sterling Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sentinel Multi-asset and Sterling Capital
The main advantage of trading using opposite Sentinel Multi-asset and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentinel Multi-asset position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.Sentinel Multi-asset vs. Davis Financial Fund | Sentinel Multi-asset vs. Mesirow Financial Small | Sentinel Multi-asset vs. Gabelli Global Financial | Sentinel Multi-asset vs. Putnam Global Financials |
Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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