Correlation Between Shelton Emerging and Ab Sustainable
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Ab Sustainable 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 Ab Sustainable 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 Ab Sustainable Thematic, you can compare the effects of market volatilities on Shelton Emerging and Ab Sustainable 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 Ab Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Ab Sustainable.
Diversification Opportunities for Shelton Emerging and Ab Sustainable
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shelton and SUTZX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic 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 Ab Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Ab Sustainable go up and down completely randomly.
Pair Corralation between Shelton Emerging and Ab Sustainable
Assuming the 90 days horizon Shelton Emerging Markets is expected to under-perform the Ab Sustainable. In addition to that, Shelton Emerging is 1.49 times more volatile than Ab Sustainable Thematic. It trades about -0.22 of its total potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.21 per unit of volatility. If you would invest 1,998 in Ab Sustainable Thematic on September 2, 2024 and sell it today you would earn a total of 60.00 from holding Ab Sustainable Thematic or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Ab Sustainable Thematic
Performance |
| Timeline |
| Shelton Emerging Markets |
| Ab Sustainable Thematic |
Shelton Emerging and Ab Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Ab Sustainable
The main advantage of trading using opposite Shelton Emerging and Ab Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Ab Sustainable 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 Ab Sustainable will offset losses from the drop in Ab Sustainable's long position.The idea behind Shelton Emerging Markets and Ab Sustainable Thematic 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.| Ab Sustainable vs. Shelton Emerging Markets | Ab Sustainable vs. Growth Strategy Fund | Ab Sustainable vs. Doubleline Emerging Markets | Ab Sustainable vs. Ashmore Emerging Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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