Correlation Between Dimensional Retirement and Sextant Growth
Can any of the company-specific risk be diversified away by investing in both Dimensional Retirement and Sextant 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 Dimensional Retirement and Sextant Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Retirement Income and Sextant Growth Fund, you can compare the effects of market volatilities on Dimensional Retirement and Sextant 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 Dimensional Retirement with a short position of Sextant Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Retirement and Sextant Growth.
Diversification Opportunities for Dimensional Retirement and Sextant Growth
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and Sextant is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Retirement Income and Sextant Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Growth and Dimensional Retirement 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 Dimensional Retirement Income are associated (or correlated) with Sextant Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Growth has no effect on the direction of Dimensional Retirement i.e., Dimensional Retirement and Sextant Growth go up and down completely randomly.
Pair Corralation between Dimensional Retirement and Sextant Growth
Assuming the 90 days horizon Dimensional Retirement Income is expected to generate 0.23 times more return on investment than Sextant Growth. However, Dimensional Retirement Income is 4.33 times less risky than Sextant Growth. It trades about 0.15 of its potential returns per unit of risk. Sextant Growth Fund is currently generating about -0.04 per unit of risk. If you would invest 1,142 in Dimensional Retirement Income on October 22, 2024 and sell it today you would earn a total of 7.00 from holding Dimensional Retirement Income or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Retirement Income vs. Sextant Growth Fund
Performance |
| Timeline |
| Dimensional Retirement |
| Sextant Growth |
Dimensional Retirement and Sextant Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Retirement and Sextant Growth
The main advantage of trading using opposite Dimensional Retirement and Sextant Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Retirement position performs unexpectedly, Sextant 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 Sextant Growth will offset losses from the drop in Sextant Growth's long position.| Dimensional Retirement vs. Locorr Market Trend | Dimensional Retirement vs. Jhancock Diversified Macro | Dimensional Retirement vs. Sp Midcap Index | Dimensional Retirement vs. Investec Emerging Markets |
| Sextant Growth vs. Voya Target Retirement | Sextant Growth vs. Wealthbuilder Moderate Balanced | Sextant Growth vs. Dimensional Retirement Income | Sextant Growth vs. Tiaa Cref Lifestyle Moderate |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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