Correlation Between Shelton Funds and Xsabx

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

By analyzing existing cross correlation between Shelton Funds and Xsabx, you can compare the effects of market volatilities on Shelton Funds and Xsabx 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 Xsabx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Xsabx.

Diversification Opportunities for Shelton Funds and Xsabx

-0.32

Correlation Coefficient

Shelton Funds  Xsabx

Very good diversification

The 3 months correlation between Shelton and Xsabx is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Xsabx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xsabx 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 Xsabx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xsabx has no effect on the direction of Shelton Funds i.e., Shelton Funds and Xsabx go up and down completely randomly.

Pair Corralation between Shelton Funds and Xsabx

Assuming the 90 days horizon Shelton Funds is expected to generate 1.99 times less return on investment than Xsabx. But when comparing it to its historical volatility, Shelton Funds is 3.71 times less risky than Xsabx. It trades about 0.08 of its potential returns per unit of risk. Xsabx is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  486.00  in Xsabx on October 3, 2024 and sell it today you would earn a total of  503.00  from holding Xsabx or generate 103.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Shelton Funds   vs.  Xsabx

Shelton Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Xsabx

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xsabx are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Xsabx 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 Funds and Xsabx

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

The idea behind Shelton Funds and Xsabx 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.