Correlation Between Lsv Small and Shelton Tactical

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

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

Diversification Opportunities for Lsv Small and Shelton Tactical

-0.26

Correlation Coefficient

Lsv Small  Shelton Tactical

Very good diversification

The 3 months correlation between Lsv and Shelton is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Shelton Tactical Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Tactical Credit and Lsv Small 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 Lsv Small Cap are associated (or correlated) with Shelton Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Tactical Credit has no effect on the direction of Lsv Small i.e., Lsv Small and Shelton Tactical go up and down completely randomly.

Pair Corralation between Lsv Small and Shelton Tactical

Assuming the 90 days horizon Lsv Small Cap is expected to generate 4.37 times more return on investment than Shelton Tactical. However, Lsv Small is 4.37 times more volatile than Shelton Tactical Credit. It trades about 0.1 of its potential returns per unit of risk. Shelton Tactical Credit is currently generating about -0.01 per unit of risk. If you would invest  1,904  in Lsv Small Cap on September 13, 2024 and sell it today you would earn a total of  132.00  from holding Lsv Small Cap or generate 6.93% return on investment over 90 days.

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

Lsv Small Cap  vs.  Shelton Tactical Credit

Lsv Small Cap

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lsv Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shelton Tactical Credit

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lsv Small and Shelton Tactical

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

The idea behind Lsv Small Cap and Shelton Tactical Credit 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.