Correlation Between Shelton E and Shelton Green

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

By analyzing existing cross correlation between Shelton E Value and Shelton Green Alpha, you can compare the effects of market volatilities on Shelton E and Shelton Green 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 E with a short position of Shelton Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton E and Shelton Green.

Diversification Opportunities for Shelton E and Shelton Green

0.83

Correlation Coefficient

Shelton E  Shelton Green

Very poor diversification

The 3 months correlation between Shelton and Shelton is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shelton E Value and Shelton Green Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Green Alpha and Shelton E 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 E Value are associated (or correlated) with Shelton Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Green Alpha has no effect on the direction of Shelton E i.e., Shelton E and Shelton Green go up and down completely randomly.

Pair Corralation between Shelton E and Shelton Green

Assuming the 90 days horizon Shelton E Value is expected to generate 0.56 times more return on investment than Shelton Green. However, Shelton E Value is 1.78 times less risky than Shelton Green. It trades about 0.11 of its potential returns per unit of risk. Shelton Green Alpha is currently generating about 0.03 per unit of risk. If you would invest  1,790  in Shelton E Value on September 13, 2024 and sell it today you would earn a total of  18.00  from holding Shelton E Value or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Shelton E Value  vs.  Shelton Green Alpha

Shelton E Value

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton E Value are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Shelton E is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shelton Green Alpha

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton Green Alpha are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Shelton Green 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 E and Shelton Green

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

The idea behind Shelton E Value and Shelton Green Alpha 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 CEOs Directory module to screen CEOs from public companies around the world.