Correlation Between Sextant Growth and Sextant Core
Can any of the company-specific risk be diversified away by investing in both Sextant Growth and Sextant Core 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 Growth and Sextant Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sextant Growth Fund and Sextant E Fund, you can compare the effects of market volatilities on Sextant Growth and Sextant Core 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 Growth with a short position of Sextant Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant Growth and Sextant Core.
Diversification Opportunities for Sextant Growth and Sextant Core
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sextant and Sextant is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sextant Growth Fund 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 Sextant Growth 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 Growth Fund are associated (or correlated) with Sextant Core. 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 Sextant Growth i.e., Sextant Growth and Sextant Core go up and down completely randomly.
Pair Corralation between Sextant Growth and Sextant Core
Assuming the 90 days horizon Sextant Growth Fund is expected to under-perform the Sextant Core. In addition to that, Sextant Growth is 2.06 times more volatile than Sextant E Fund. It trades about 0.0 of its total potential returns per unit of risk. Sextant E Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,663 in Sextant E Fund on October 21, 2024 and sell it today you would earn a total of 18.00 from holding Sextant E Fund or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sextant Growth Fund vs. Sextant E Fund
Performance |
| Timeline |
| Sextant Growth |
| Sextant E Fund |
Sextant Growth and Sextant Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sextant Growth and Sextant Core
The main advantage of trading using opposite Sextant Growth and Sextant Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant Growth position performs unexpectedly, Sextant Core 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 Core will offset losses from the drop in Sextant Core's long position.| Sextant Growth vs. Sextant Growth Fund | Sextant Growth vs. Sextant International Fund | Sextant Growth vs. Sextant Bond Income | Sextant Growth vs. Sextant Short Term Bond |
| Sextant Core vs. Sextant Growth Fund | Sextant Core vs. Sextant International Fund | Sextant Core vs. Sextant Bond Income | Sextant Core vs. Sextant Short Term Bond |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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