Correlation Between Touchstone Sands and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands 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 Touchstone Sands and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and Sentinel Small, you can compare the effects of market volatilities on Touchstone Sands 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 Touchstone Sands with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and Sentinel Small.
Diversification Opportunities for Touchstone Sands and Sentinel Small
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Sentinel is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Touchstone Sands 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 Touchstone Sands Capital 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 has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Sentinel Small go up and down completely randomly.
Pair Corralation between Touchstone Sands and Sentinel Small
Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 1.13 times more return on investment than Sentinel Small. However, Touchstone Sands is 1.13 times more volatile than Sentinel Small. It trades about 0.39 of its potential returns per unit of risk. Sentinel Small is currently generating about 0.2 per unit of risk. If you would invest 1,596 in Touchstone Sands Capital on April 23, 2025 and sell it today you would earn a total of 499.00 from holding Touchstone Sands Capital or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. Sentinel Small
Performance |
| Timeline |
| Touchstone Sands Capital |
| Sentinel Small |
Touchstone Sands and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and Sentinel Small
The main advantage of trading using opposite Touchstone Sands and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands 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.| Touchstone Sands vs. Touchstone Small Cap | Touchstone Sands vs. Touchstone Sands Capital | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth |
| Sentinel Small vs. Touchstone Sands Capital | Sentinel Small vs. Mid Cap Growth | Sentinel Small vs. Mid Cap Growth | Sentinel Small vs. Sentinel Small Pany |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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