Correlation Between Dow Jones and Shelton Tactical
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Shelton Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Shelton Tactical Credit, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Shelton Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Shelton Tactical.
Diversification Opportunities for Dow Jones and Shelton Tactical
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Shelton is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Shelton Tactical go up and down completely randomly.
Pair Corralation between Dow Jones and Shelton Tactical
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.86 times more return on investment than Shelton Tactical. However, Dow Jones is 2.86 times more volatile than Shelton Tactical Credit. It trades about 0.11 of its potential returns per unit of risk. Shelton Tactical Credit is currently generating about 0.12 per unit of risk. If you would invest 3,858,519 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 632,546 from holding Dow Jones Industrial or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Dow Jones Industrial vs. Shelton Tactical Credit
Performance |
| Timeline |
Dow Jones and Shelton Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Shelton Tactical Credit
Pair trading matchups for Shelton Tactical
Pair Trading with Dow Jones and Shelton Tactical
The main advantage of trading using opposite Dow Jones and Shelton Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Shelton Tactical vs. Shelton Emerging Markets | Shelton Tactical vs. Shelton Emerging Markets | Shelton Tactical vs. California Tax Free Income | Shelton Tactical vs. Shelton Funds |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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