Correlation Between Shelton Core and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Shelton Core and Dow Jones 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 Core and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton E Value and Dow Jones Industrial, you can compare the effects of market volatilities on Shelton Core and Dow Jones 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 Core with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Core and Dow Jones.
Diversification Opportunities for Shelton Core and Dow Jones
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shelton and Dow is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Shelton E Value and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Shelton Core 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 E Value are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Shelton Core i.e., Shelton Core and Dow Jones go up and down completely randomly.
Pair Corralation between Shelton Core and Dow Jones
Assuming the 90 days horizon Shelton Core is expected to generate 2.05 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Shelton E Value is 1.62 times less risky than Dow Jones. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 233,449 from holding Dow Jones Industrial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton E Value vs. Dow Jones Industrial
Performance |
| Timeline |
Shelton Core and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shelton E Value
Pair trading matchups for Shelton Core
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shelton Core and Dow Jones
The main advantage of trading using opposite Shelton Core and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Core position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Shelton Core vs. Hennessy Bp Energy | Shelton Core vs. Franklin Natural Resources | Shelton Core vs. Tortoise Energy Independence | Shelton Core vs. Oil Gas Ultrasector |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |