Correlation Between Shelton Emerging and Federated Equity
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Federated Equity 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 Emerging and Federated Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Federated Equity Income, you can compare the effects of market volatilities on Shelton Emerging and Federated Equity 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 Emerging with a short position of Federated Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Federated Equity.
Diversification Opportunities for Shelton Emerging and Federated Equity
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shelton and Federated is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Federated Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Equity Income and Shelton Emerging 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 Emerging Markets are associated (or correlated) with Federated Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Equity Income has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Federated Equity go up and down completely randomly.
Pair Corralation between Shelton Emerging and Federated Equity
Assuming the 90 days horizon Shelton Emerging is expected to generate 2.78 times less return on investment than Federated Equity. In addition to that, Shelton Emerging is 1.37 times more volatile than Federated Equity Income. It trades about 0.03 of its total potential returns per unit of risk. Federated Equity Income is currently generating about 0.1 per unit of volatility. If you would invest 2,198 in Federated Equity Income on September 12, 2024 and sell it today you would earn a total of 386.00 from holding Federated Equity Income or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Federated Equity Income
Performance |
| Timeline |
| Shelton Emerging Markets |
| Federated Equity Income |
Shelton Emerging and Federated Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Federated Equity
The main advantage of trading using opposite Shelton Emerging and Federated Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Federated Equity 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 Federated Equity will offset losses from the drop in Federated Equity's long position.| Shelton Emerging vs. American Funds New | Shelton Emerging vs. SCOR PK | Shelton Emerging vs. Morningstar Unconstrained Allocation | Shelton Emerging vs. Via Renewables |
| Federated Equity vs. Vanguard Value Index | Federated Equity vs. Dodge Cox Stock | Federated Equity vs. American Mutual Fund | Federated Equity vs. American Funds American |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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