Correlation Between Shelton Emerging and Wilmington Multi-manager

Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Wilmington Multi-manager 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 Wilmington Multi-manager 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 Wilmington Multi Manager Real, you can compare the effects of market volatilities on Shelton Emerging and Wilmington Multi-manager 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 Wilmington Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Wilmington Multi-manager.

Diversification Opportunities for Shelton Emerging and Wilmington Multi-manager

0.65

Correlation Coefficient

Shelton Emerging  Wilmington Multi-manager

Poor diversification

The 3 months correlation between Shelton and Wilmington is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Wilmington Multi Manager Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Multi-manager 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 Wilmington Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Multi-manager has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Wilmington Multi-manager go up and down completely randomly.

Pair Corralation between Shelton Emerging and Wilmington Multi-manager

Assuming the 90 days horizon Shelton Emerging is expected to generate 2.41 times less return on investment than Wilmington Multi-manager. In addition to that, Shelton Emerging is 1.57 times more volatile than Wilmington Multi Manager Real. It trades about 0.02 of its total potential returns per unit of risk. Wilmington Multi Manager Real is currently generating about 0.08 per unit of volatility. If you would invest  1,411  in Wilmington Multi Manager Real on December 4, 2024 and sell it today you would earn a total of  35.00  from holding Wilmington Multi Manager Real or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Shelton Emerging Markets  vs.  Wilmington Multi Manager Real

Shelton Emerging Markets

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton Emerging Markets are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Wilmington Multi-manager

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmington Multi Manager Real are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Wilmington Multi-manager is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shelton Emerging and Wilmington Multi-manager

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

The idea behind Shelton Emerging Markets and Wilmington Multi Manager Real 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..