Correlation Between American Funds and Sextant E
Can any of the company-specific risk be diversified away by investing in both American Funds and Sextant E 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 American Funds and Sextant E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Sextant E Fund, you can compare the effects of market volatilities on American Funds and Sextant E 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 American Funds with a short position of Sextant E. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Sextant E.
Diversification Opportunities for American Funds and Sextant E
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Sextant is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Sextant E Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant E Fund and American Funds 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 American Funds American are associated (or correlated) with Sextant E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant E Fund has no effect on the direction of American Funds i.e., American Funds and Sextant E go up and down completely randomly.
Pair Corralation between American Funds and Sextant E
Assuming the 90 days horizon American Funds American is expected to generate 1.19 times more return on investment than Sextant E. However, American Funds is 1.19 times more volatile than Sextant E Fund. It trades about 0.12 of its potential returns per unit of risk. Sextant E Fund is currently generating about 0.1 per unit of risk. If you would invest 2,768 in American Funds American on September 14, 2024 and sell it today you would earn a total of 942.00 from holding American Funds American or generate 34.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds American vs. Sextant E Fund
Performance |
| Timeline |
| American Funds American |
| Sextant E Fund |
American Funds and Sextant E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Sextant E
The main advantage of trading using opposite American Funds and Sextant E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Sextant E 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 Sextant E will offset losses from the drop in Sextant E's long position.| American Funds vs. American Funds Growth | American Funds vs. American Funds Income | American Funds vs. American Funds Global | American Funds vs. American Funds Growth |
| Sextant E vs. Multisector Bond Sma | Sextant E vs. Alliancebernstein Bond | Sextant E vs. Ishares Municipal Bond | Sextant E vs. Ft 9331 Corporate |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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