Correlation Between Columbia Moderate and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Columbia Moderate 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 Columbia Moderate and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Moderate Growth and Sentinel Small, you can compare the effects of market volatilities on Columbia Moderate 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 Columbia Moderate with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Moderate and Sentinel Small.
Diversification Opportunities for Columbia Moderate and Sentinel Small
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Sentinel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Moderate Growth and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Columbia Moderate 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 Columbia Moderate Growth 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 Columbia Moderate i.e., Columbia Moderate and Sentinel Small go up and down completely randomly.
Pair Corralation between Columbia Moderate and Sentinel Small
Assuming the 90 days horizon Columbia Moderate is expected to generate 1.35 times less return on investment than Sentinel Small. But when comparing it to its historical volatility, Columbia Moderate Growth is 2.17 times less risky than Sentinel Small. It trades about 0.32 of its potential returns per unit of risk. Sentinel Small is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Sentinel Small on April 24, 2025 and sell it today you would earn a total of 75.00 from holding Sentinel Small or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Moderate Growth vs. Sentinel Small
Performance |
| Timeline |
| Columbia Moderate Growth |
| Sentinel Small |
Columbia Moderate and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Moderate and Sentinel Small
The main advantage of trading using opposite Columbia Moderate and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Moderate 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.| Columbia Moderate vs. Jp Morgan Smartretirement | Columbia Moderate vs. L Abbett Growth | Columbia Moderate vs. Aquila Three Peaks | Columbia Moderate vs. Artisan International Explorer |
| Sentinel Small vs. Schwab Health Care | Sentinel Small vs. Allianzgi Health Sciences | Sentinel Small vs. Vanguard Health Care | Sentinel Small vs. Live Oak Health |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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