Correlation Between F/m Investments and Sextant Growth
Can any of the company-specific risk be diversified away by investing in both F/m Investments 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 F/m Investments and Sextant Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fm Investments Large and Sextant Growth Fund, you can compare the effects of market volatilities on F/m Investments 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 F/m Investments with a short position of Sextant Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of F/m Investments and Sextant Growth.
Diversification Opportunities for F/m Investments and Sextant Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between F/m and Sextant is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Sextant Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Growth and F/m Investments 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 Fm Investments Large 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 F/m Investments i.e., F/m Investments and Sextant Growth go up and down completely randomly.
Pair Corralation between F/m Investments and Sextant Growth
Assuming the 90 days horizon Fm Investments Large is expected to generate 1.2 times more return on investment than Sextant Growth. However, F/m Investments is 1.2 times more volatile than Sextant Growth Fund. It trades about 0.08 of its potential returns per unit of risk. Sextant Growth Fund is currently generating about 0.08 per unit of risk. If you would invest 1,339 in Fm Investments Large on August 22, 2025 and sell it today you would earn a total of 861.00 from holding Fm Investments Large or generate 64.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fm Investments Large vs. Sextant Growth Fund
Performance |
| Timeline |
| Fm Investments Large |
| Sextant Growth |
F/m Investments and Sextant Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with F/m Investments and Sextant Growth
The main advantage of trading using opposite F/m Investments and Sextant Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F/m Investments 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.| F/m Investments vs. Fm Investments Large | F/m Investments vs. Hennessy Large Cap | F/m Investments vs. Frontier Mfg E | F/m Investments vs. Frontier Mfg E |
| Sextant Growth vs. Sextant International Fund | Sextant Growth vs. Sextant International Fund | Sextant Growth vs. Schwab Target 2015 | Sextant Growth vs. Hennessy Large Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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