Correlation Between Sextant International and Sextant Global
Can any of the company-specific risk be diversified away by investing in both Sextant International and Sextant Global 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 International and Sextant Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sextant International Fund and Sextant Global High, you can compare the effects of market volatilities on Sextant International and Sextant Global 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 International with a short position of Sextant Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant International and Sextant Global.
Diversification Opportunities for Sextant International and Sextant Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sextant and Sextant is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sextant International Fund and Sextant Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Global High and Sextant International 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 International Fund are associated (or correlated) with Sextant Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Global High has no effect on the direction of Sextant International i.e., Sextant International and Sextant Global go up and down completely randomly.
Pair Corralation between Sextant International and Sextant Global
Assuming the 90 days horizon Sextant International is expected to generate 13.89 times less return on investment than Sextant Global. In addition to that, Sextant International is 2.19 times more volatile than Sextant Global High. It trades about 0.0 of its total potential returns per unit of risk. Sextant Global High is currently generating about 0.06 per unit of volatility. If you would invest 1,055 in Sextant Global High on September 14, 2024 and sell it today you would earn a total of 34.00 from holding Sextant Global High or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sextant International Fund vs. Sextant Global High
Performance |
| Timeline |
| Sextant International |
| Sextant Global High |
Sextant International and Sextant Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sextant International and Sextant Global
The main advantage of trading using opposite Sextant International and Sextant Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant International position performs unexpectedly, Sextant Global 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 Global will offset losses from the drop in Sextant Global's long position.| Sextant International vs. Sextant International Fund | Sextant International vs. Sextant Growth Fund | Sextant International vs. Sextant Global High | Sextant International vs. Sextant Bond Income |
| Sextant Global vs. Sextant Growth Fund | Sextant Global vs. Sextant International Fund | Sextant Global vs. Sextant Bond Income | Sextant Global 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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