Correlation Between Pcm Fund and Sextant International

Can any of the company-specific risk be diversified away by investing in both Pcm Fund 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 Pcm Fund and Sextant International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pcm Fund and Sextant International Fund, you can compare the effects of market volatilities on Pcm Fund 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 Pcm Fund with a short position of Sextant International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pcm Fund and Sextant International.

Diversification Opportunities for Pcm Fund and Sextant International

0.33

Correlation Coefficient

Pcm Fund  Sextant International

Weak diversification

The 3 months correlation between Pcm and Sextant is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pcm 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 Pcm Fund 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 Pcm 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 Pcm Fund i.e., Pcm Fund and Sextant International go up and down completely randomly.

Pair Corralation between Pcm Fund and Sextant International

Considering the 90-day investment horizon Pcm Fund is expected to under-perform the Sextant International. But the fund apears to be less risky and, when comparing its historical volatility, Pcm Fund is 1.2 times less risky than Sextant International. The fund trades about -0.01 of its potential returns per unit of risk. The Sextant International Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,546  in Sextant International Fund on August 22, 2025 and sell it today you would earn a total of  101.00  from holding Sextant International Fund or generate 3.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pcm Fund  vs.  Sextant International Fund

Pcm Fund

Risk-Adjusted Performance

Weakest

Over the last 90 days Pcm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy fundamental indicators, Pcm Fund is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sextant International

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Sextant International Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sextant International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pcm Fund and Sextant International

The main advantage of trading using opposite Pcm Fund and Sextant International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pcm Fund 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.

The idea behind Pcm Fund and Sextant International Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.