Correlation Between Applied Finance and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Applied Finance 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 Applied Finance and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Sentinel Small Pany, you can compare the effects of market volatilities on Applied Finance 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 Applied Finance with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Sentinel Small.
Diversification Opportunities for Applied Finance and Sentinel Small
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Applied and Sentinel is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer 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 Applied Finance 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 Applied Finance Explorer 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 Applied Finance i.e., Applied Finance and Sentinel Small go up and down completely randomly.
Pair Corralation between Applied Finance and Sentinel Small
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 1.05 times more return on investment than Sentinel Small. However, Applied Finance is 1.05 times more volatile than Sentinel Small Pany. It trades about 0.19 of its potential returns per unit of risk. Sentinel Small Pany is currently generating about 0.14 per unit of risk. If you would invest 2,137 in Applied Finance Explorer on June 12, 2025 and sell it today you would earn a total of 267.00 from holding Applied Finance Explorer or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Sentinel Small Pany
Performance |
| Timeline |
| Applied Finance Explorer |
| Sentinel Small Pany |
Applied Finance and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Sentinel Small
The main advantage of trading using opposite Applied Finance and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance 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.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Sentinel Small vs. Bmo In Retirement Fund | Sentinel Small vs. Evaluator Moderate Rms | Sentinel Small vs. Sa Worldwide Moderate | Sentinel Small vs. Fidelity Managed Retirement |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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