Correlation Between Sentinel Small and Goldman Sachs

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

By analyzing existing cross correlation between Sentinel Small Pany and Goldman Sachs Esg, you can compare the effects of market volatilities on Sentinel Small and Goldman Sachs 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 Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentinel Small and Goldman Sachs.

Diversification Opportunities for Sentinel Small and Goldman Sachs

-0.39

Correlation Coefficient

Sentinel Small  Goldman Sachs

Very good diversification

The 3 months correlation between Sentinel and Goldman is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sentinel Small Pany and Goldman Sachs Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Esg and Sentinel Small 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 Small Pany are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Esg has no effect on the direction of Sentinel Small i.e., Sentinel Small and Goldman Sachs go up and down completely randomly.

Pair Corralation between Sentinel Small and Goldman Sachs

Assuming the 90 days horizon Sentinel Small Pany is expected to under-perform the Goldman Sachs. In addition to that, Sentinel Small is 1.04 times more volatile than Goldman Sachs Esg. It trades about -0.1 of its total potential returns per unit of risk. Goldman Sachs Esg is currently generating about 0.04 per unit of volatility. If you would invest  982.00  in Goldman Sachs Esg on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Goldman Sachs Esg or generate 2.55% return on investment over 90 days.

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

Sentinel Small Pany  vs.  Goldman Sachs Esg

Sentinel Small Pany

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sentinel Small Pany has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Goldman Sachs Esg

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Esg are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sentinel Small and Goldman Sachs

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

The idea behind Sentinel Small Pany and Goldman Sachs Esg 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.