Yes, I'm sure he does watch over your sister. Does she feel his presence? When she has accepted and moves on he will move on too. Not to say that he will not pop in from time to time to check on her.
The most important thing to remember and it's hard, is that when a person dies and crosses over they are fine, happy and in a much better state of being then we who still travel along in our physical bodies are. They will meet again, when the time comes.