Correlation Between Amana Income and Sextant International
Can any of the company-specific risk be diversified away by investing in both Amana Income and Sextant International 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 Amana Income and Sextant International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Income Fund and Sextant International Fund, you can compare the effects of market volatilities on Amana Income and Sextant International 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 Amana Income with a short position of Sextant International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Income and Sextant International.
Diversification Opportunities for Amana Income and Sextant International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amana and Sextant is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amana Income Fund and Sextant International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant International and Amana Income 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 Amana Income Fund are associated (or correlated) with Sextant International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant International has no effect on the direction of Amana Income i.e., Amana Income and Sextant International go up and down completely randomly.
Pair Corralation between Amana Income and Sextant International
Assuming the 90 days horizon Amana Income Fund is expected to under-perform the Sextant International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amana Income Fund is 1.57 times less risky than Sextant International. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Sextant International Fund is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,206 in Sextant International Fund on December 28, 2024 and sell it today you would lose (30.00) from holding Sextant International Fund or give up 1.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amana Income Fund vs. Sextant International Fund
Performance |
Timeline |
Amana Income |
Sextant International |
Amana Income and Sextant International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amana Income and Sextant International
The main advantage of trading using opposite Amana Income and Sextant International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Income position performs unexpectedly, Sextant International 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 International will offset losses from the drop in Sextant International's long position.Amana Income vs. Amana Growth Fund | Amana Income vs. Amana Developing World | Amana Income vs. Iman Fund Class | Amana Income vs. Azzad Ethical Fund |
Sextant International vs. Sextant Growth Fund | Sextant International vs. Amana Income Fund | Sextant International vs. Amana Growth Fund | Sextant International vs. Sextant Bond Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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