Correlation Between Artisan International and Sentinel Small

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

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

Diversification Opportunities for Artisan International and Sentinel Small

0.85

Correlation Coefficient

Artisan International  Sentinel Small

Very poor diversification

The 3 months correlation between Artisan and Sentinel is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Artisan International Explorer and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Artisan International 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 Artisan International 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 has no effect on the direction of Artisan International i.e., Artisan International and Sentinel Small go up and down completely randomly.

Pair Corralation between Artisan International and Sentinel Small

Assuming the 90 days horizon Artisan International is expected to generate 1.22 times less return on investment than Sentinel Small. But when comparing it to its historical volatility, Artisan International Explorer is 1.66 times less risky than Sentinel Small. It trades about 0.14 of its potential returns per unit of risk. Sentinel Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  593.00  in Sentinel Small on May 6, 2025 and sell it today you would earn a total of  37.00  from holding Sentinel Small or generate 6.24% return on investment over 90 days.

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

Artisan International Explorer  vs.  Sentinel Small

Artisan International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan International Explorer are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Artisan International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sentinel Small

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sentinel Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Sentinel Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Artisan International and Sentinel Small

The main advantage of trading using opposite Artisan International and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan International 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.

The idea behind Artisan International Explorer and Sentinel Small 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.

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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..