Correlation Between Ambrus Core and Shelton Funds

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

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

Diversification Opportunities for Ambrus Core and Shelton Funds

-0.37

Correlation Coefficient

Ambrus Core  Shelton Funds

Very good diversification

The 3 months correlation between Ambrus and Shelton is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Shelton Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Funds has no effect on the direction of Ambrus Core i.e., Ambrus Core and Shelton Funds go up and down completely randomly.

Pair Corralation between Ambrus Core and Shelton Funds

Assuming the 90 days horizon Ambrus Core is expected to generate 6.99 times less return on investment than Shelton Funds. But when comparing it to its historical volatility, Ambrus Core Bond is 4.94 times less risky than Shelton Funds. It trades about 0.07 of its potential returns per unit of risk. Shelton Funds is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,361  in Shelton Funds on September 27, 2024 and sell it today you would earn a total of  1,696  from holding Shelton Funds or generate 71.83% return on investment over 90 days.

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

Ambrus Core Bond  vs.  Shelton Funds

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shelton Funds

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Ambrus Core and Shelton Funds

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

The idea behind Ambrus Core Bond and Shelton Funds 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.