Correlation Between Sextant Bond and Amana Income
Can any of the company-specific risk be diversified away by investing in both Sextant Bond and Amana Income 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 Sextant Bond and Amana Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sextant Bond Income and Amana Income Fund, you can compare the effects of market volatilities on Sextant Bond and Amana Income 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 Sextant Bond with a short position of Amana Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant Bond and Amana Income.
Diversification Opportunities for Sextant Bond and Amana Income
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sextant and Amana is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sextant Bond Income and Amana Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Income and Sextant Bond 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 Sextant Bond Income are associated (or correlated) with Amana Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Income has no effect on the direction of Sextant Bond i.e., Sextant Bond and Amana Income go up and down completely randomly.
Pair Corralation between Sextant Bond and Amana Income
Assuming the 90 days horizon Sextant Bond is expected to generate 8.87 times less return on investment than Amana Income. But when comparing it to its historical volatility, Sextant Bond Income is 1.53 times less risky than Amana Income. It trades about 0.01 of its potential returns per unit of risk. Amana Income Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,363 in Amana Income Fund on October 7, 2024 and sell it today you would earn a total of 1,085 from holding Amana Income Fund or generate 20.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sextant Bond Income vs. Amana Income Fund
Performance |
| Timeline |
| Sextant Bond Income |
| Amana Income |
Sextant Bond and Amana Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sextant Bond and Amana Income
The main advantage of trading using opposite Sextant Bond and Amana Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant Bond position performs unexpectedly, Amana Income 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 Amana Income will offset losses from the drop in Amana Income's long position.| Sextant Bond vs. Fidelity Advisor Health | Sextant Bond vs. Highland Longshort Healthcare | Sextant Bond vs. The Hartford Healthcare | Sextant Bond vs. Hartford Healthcare Hls |
| Amana Income vs. Amana Growth Fund | Amana Income vs. Amana Developing World | Amana Income vs. Iman Fund Class | Amana Income vs. Azzad Ethical Fund |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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