Correlation Between Touchstone Mid and Sentinel Mon

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

By analyzing existing cross correlation between Touchstone Mid Cap and Sentinel Mon Stock, you can compare the effects of market volatilities on Touchstone Mid and Sentinel Mon 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 Mid with a short position of Sentinel Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Mid and Sentinel Mon.

Diversification Opportunities for Touchstone Mid and Sentinel Mon

0.97

Correlation Coefficient

Touchstone Mid  Sentinel Mon

Almost no diversification

The 3 months correlation between Touchstone and Sentinel is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Mid Cap and Sentinel Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Mon Stock and Touchstone Mid 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 Mid Cap are associated (or correlated) with Sentinel Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Mon Stock has no effect on the direction of Touchstone Mid i.e., Touchstone Mid and Sentinel Mon go up and down completely randomly.

Pair Corralation between Touchstone Mid and Sentinel Mon

Assuming the 90 days horizon Touchstone Mid Cap is expected to generate 1.3 times more return on investment than Sentinel Mon. However, Touchstone Mid is 1.3 times more volatile than Sentinel Mon Stock. It trades about 0.17 of its potential returns per unit of risk. Sentinel Mon Stock is currently generating about 0.22 per unit of risk. If you would invest  4,080  in Touchstone Mid Cap on May 4, 2025 and sell it today you would earn a total of  474.00  from holding Touchstone Mid Cap or generate 11.62% return on investment over 90 days.

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

Touchstone Mid Cap  vs.  Sentinel Mon Stock

Touchstone Mid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Mid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Touchstone Mid may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sentinel Mon Stock

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sentinel Mon Stock are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Sentinel Mon may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Touchstone Mid and Sentinel Mon

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

The idea behind Touchstone Mid Cap and Sentinel Mon Stock 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.