Correlation Between Sextant Bond and Sextant Core
Can any of the company-specific risk be diversified away by investing in both Sextant Bond 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 Bond 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 Bond Income and Sextant E Fund, you can compare the effects of market volatilities on Sextant Bond 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 Bond with a short position of Sextant Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant Bond and Sextant Core.
Diversification Opportunities for Sextant Bond and Sextant Core
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sextant and Sextant is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sextant Bond Income 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 Bond 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 Bond Income 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 Bond i.e., Sextant Bond and Sextant Core go up and down completely randomly.
Pair Corralation between Sextant Bond and Sextant Core
Assuming the 90 days horizon Sextant Bond Income is expected to generate 0.63 times more return on investment than Sextant Core. However, Sextant Bond Income is 1.6 times less risky than Sextant Core. It trades about 0.11 of its potential returns per unit of risk. Sextant E Fund is currently generating about -0.03 per unit of risk. If you would invest 428.00 in Sextant Bond Income on December 29, 2024 and sell it today you would earn a total of 11.00 from holding Sextant Bond Income or generate 2.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sextant Bond Income vs. Sextant E Fund
Performance |
Timeline |
Sextant Bond Income |
Sextant E Fund |
Sextant Bond and Sextant Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sextant Bond and Sextant Core
The main advantage of trading using opposite Sextant Bond and Sextant Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant Bond 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 Bond vs. Fidelity Government Money | Sextant Bond vs. Money Market Obligations | Sextant Bond vs. John Hancock Money | Sextant Bond vs. Gabelli Global Financial |
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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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