Correlation Between Shelton Emerging and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Nasdaq-100(r) 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 Nasdaq-100(r) 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 Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Shelton Emerging and Nasdaq-100(r) 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 Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Nasdaq-100(r).
Diversification Opportunities for Shelton Emerging and Nasdaq-100(r)
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shelton and Nasdaq-100(r) is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x 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 Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Shelton Emerging and Nasdaq-100(r)
Assuming the 90 days horizon Shelton Emerging Markets is expected to under-perform the Nasdaq-100(r). But the mutual fund apears to be less risky and, when comparing its historical volatility, Shelton Emerging Markets is 2.65 times less risky than Nasdaq-100(r). The mutual fund trades about -0.2 of its potential returns per unit of risk. The Nasdaq 100 2x Strategy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 55,321 in Nasdaq 100 2x Strategy on August 29, 2024 and sell it today you would earn a total of 2,735 from holding Nasdaq 100 2x Strategy or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Shelton Emerging Markets |
| Nasdaq 100 2x |
Shelton Emerging and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Nasdaq-100(r)
The main advantage of trading using opposite Shelton Emerging and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Nasdaq-100(r) 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 Nasdaq-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.| Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. HUMANA INC | Shelton Emerging vs. Aquagold International |
| Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Direxion Monthly Nasdaq 100 | Nasdaq-100(r) vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq-100(r) vs. Nasdaq 100 2x Strategy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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