Correlation Between Global Gold and Shelton Core
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and Shelton Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Shelton E Value, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of Shelton Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Shelton Core.
Diversification Opportunities for Global Gold and Shelton Core
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Shelton is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund 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 Global Gold 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 Global Gold Fund 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 Global Gold i.e., Global Gold and Shelton Core go up and down completely randomly.
Pair Corralation between Global Gold and Shelton Core
Assuming the 90 days horizon Global Gold Fund is expected to under-perform the Shelton Core. In addition to that, Global Gold is 3.38 times more volatile than Shelton E Value. It trades about -0.26 of its total potential returns per unit of risk. Shelton E Value is currently generating about 0.18 per unit of volatility. If you would invest 1,655 in Shelton E Value on August 30, 2024 and sell it today you would earn a total of 41.00 from holding Shelton E Value or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Gold Fund vs. Shelton E Value
Performance |
| Timeline |
| Global Gold Fund |
| Shelton E Value |
Global Gold and Shelton Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Shelton Core
The main advantage of trading using opposite Global Gold and Shelton Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. Mid Cap Value | Global Gold vs. Equity Growth Fund | Global Gold vs. Income Growth Fund | Global Gold vs. Diversified Bond Fund |
| Shelton Core vs. Franklin Gold Precious | Shelton Core vs. James Balanced Golden | Shelton Core vs. First Eagle Gold | Shelton Core vs. Global Gold Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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