Correlation Between Sextant International and Amana Growth
Can any of the company-specific risk be diversified away by investing in both Sextant International and Amana Growth 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 Amana Growth 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 Amana Growth Fund, you can compare the effects of market volatilities on Sextant International and Amana Growth 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 Amana Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant International and Amana Growth.
Diversification Opportunities for Sextant International and Amana Growth
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sextant and Amana is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sextant International Fund and Amana Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Growth 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 Amana Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Growth has no effect on the direction of Sextant International i.e., Sextant International and Amana Growth go up and down completely randomly.
Pair Corralation between Sextant International and Amana Growth
Assuming the 90 days horizon Sextant International Fund is expected to generate 0.93 times more return on investment than Amana Growth. However, Sextant International Fund is 1.08 times less risky than Amana Growth. It trades about -0.06 of its potential returns per unit of risk. Amana Growth Fund is currently generating about -0.1 per unit of risk. If you would invest 2,312 in Sextant International Fund on October 9, 2024 and sell it today you would lose (59.00) from holding Sextant International Fund or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sextant International Fund vs. Amana Growth Fund
Performance |
| Timeline |
| Sextant International |
| Amana Growth |
Sextant International and Amana Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sextant International and Amana Growth
The main advantage of trading using opposite Sextant International and Amana Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant International position performs unexpectedly, Amana Growth 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 Growth will offset losses from the drop in Amana Growth's long position.| Sextant International vs. Sextant Growth Fund | Sextant International vs. Amana Income Fund | Sextant International vs. Amana Growth Fund | Sextant International vs. Sextant Bond Income |
| Amana Growth vs. Jhancock Real Estate | Amana Growth vs. Short Real Estate | Amana Growth vs. Pender Real Estate | Amana Growth vs. Nexpoint Real Estate |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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