Correlation Between Shelton Emerging and Steward Small

Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Steward Small 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 Shelton Emerging and Steward Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shelton Emerging Markets and Steward Small Mid Cap, you can compare the effects of market volatilities on Shelton Emerging and Steward Small 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 Shelton Emerging with a short position of Steward Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Steward Small.

Diversification Opportunities for Shelton Emerging and Steward Small

-0.49

Correlation Coefficient

Shelton Emerging  Steward Small

Very good diversification

The 3 months correlation between Shelton and Steward is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid and Shelton Emerging 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 Shelton Emerging Markets are associated (or correlated) with Steward Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Steward Small go up and down completely randomly.

Pair Corralation between Shelton Emerging and Steward Small

Assuming the 90 days horizon Shelton Emerging is expected to generate 44.67 times less return on investment than Steward Small. But when comparing it to its historical volatility, Shelton Emerging Markets is 1.01 times less risky than Steward Small. It trades about 0.0 of its potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,333  in Steward Small Mid Cap on September 15, 2024 and sell it today you would earn a total of  102.00  from holding Steward Small Mid Cap or generate 7.65% return on investment over 90 days.

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

Shelton Emerging Markets  vs.  Steward Small Mid Cap

Shelton Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shelton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Shelton Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Steward Small Mid

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Steward Small Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Steward Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Shelton Emerging and Steward Small

The main advantage of trading using opposite Shelton Emerging and Steward Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Steward Small 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 Steward Small will offset losses from the drop in Steward Small's long position.

The idea behind Shelton Emerging Markets and Steward Small Mid Cap 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.