Correlation Between American Funds and Shelton Funds
Can any of the company-specific risk be diversified away by investing in both American Funds and Shelton Funds 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 American Funds and Shelton Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Shelton Funds , you can compare the effects of market volatilities on American Funds and Shelton Funds 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 American Funds with a short position of Shelton Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Shelton Funds.
Diversification Opportunities for American Funds and Shelton Funds
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Shelton is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and American Funds 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 American Funds Inflation are associated (or correlated) with Shelton Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Funds has no effect on the direction of American Funds i.e., American Funds and Shelton Funds go up and down completely randomly.
Pair Corralation between American Funds and Shelton Funds
Assuming the 90 days horizon American Funds is expected to generate 11.28 times less return on investment than Shelton Funds. But when comparing it to its historical volatility, American Funds Inflation is 3.13 times less risky than Shelton Funds. It trades about 0.02 of its potential returns per unit of risk. Shelton Funds is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,501 in Shelton Funds on September 2, 2024 and sell it today you would earn a total of 1,393 from holding Shelton Funds or generate 55.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Inflation vs. Shelton Funds
Performance |
| Timeline |
| American Funds Inflation |
| Shelton Funds |
American Funds and Shelton Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Shelton Funds
The main advantage of trading using opposite American Funds and Shelton Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Shelton Funds 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 Funds will offset losses from the drop in Shelton Funds' long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Shelton Funds vs. Shelton Emerging Markets | Shelton Funds vs. Shelton Emerging Markets | Shelton Funds vs. California Tax Free Income | Shelton Funds vs. Shelton E Value |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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