Correlation Between Shelton Funds and Shelton Core
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Shelton Core 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 Funds and Shelton Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Funds and Shelton E Value, you can compare the effects of market volatilities on Shelton Funds and Shelton Core 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 Funds with a short position of Shelton Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Shelton Core.
Diversification Opportunities for Shelton Funds and Shelton Core
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shelton and Shelton is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Shelton E Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton E Value and Shelton Funds 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 Funds are associated (or correlated) with Shelton Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton E Value has no effect on the direction of Shelton Funds i.e., Shelton Funds and Shelton Core go up and down completely randomly.
Pair Corralation between Shelton Funds and Shelton Core
Assuming the 90 days horizon Shelton Funds is expected to generate 1.83 times more return on investment than Shelton Core. However, Shelton Funds is 1.83 times more volatile than Shelton E Value. It trades about -0.01 of its potential returns per unit of risk. Shelton E Value is currently generating about -0.04 per unit of risk. If you would invest 3,931 in Shelton Funds on December 2, 2024 and sell it today you would lose (48.00) from holding Shelton Funds or give up 1.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shelton Funds vs. Shelton E Value
Performance |
Timeline |
Shelton Funds |
Shelton E Value |
Shelton Funds and Shelton Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shelton Funds and Shelton Core
The main advantage of trading using opposite Shelton Funds and Shelton Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Shelton Core 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 Core will offset losses from the drop in Shelton Core's long position.Shelton Funds vs. Prudential California Muni | Shelton Funds vs. Us Government Securities | Shelton Funds vs. Lord Abbett Intermediate | Shelton Funds vs. Ab Municipal Bond |
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Check out your portfolio center.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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