Correlation Between Free Market and Shelton Funds
Can any of the company-specific risk be diversified away by investing in both Free Market 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 Free Market and Shelton Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Free Market International and Shelton Funds , you can compare the effects of market volatilities on Free Market 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 Free Market with a short position of Shelton Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Free Market and Shelton Funds.
Diversification Opportunities for Free Market and Shelton Funds
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Free and Shelton is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Free Market International and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and Free Market 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 Free Market International 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 Free Market i.e., Free Market and Shelton Funds go up and down completely randomly.
Pair Corralation between Free Market and Shelton Funds
Assuming the 90 days horizon Free Market International is expected to generate 0.76 times more return on investment than Shelton Funds. However, Free Market International is 1.32 times less risky than Shelton Funds. It trades about 0.3 of its potential returns per unit of risk. Shelton Funds is currently generating about -0.08 per unit of risk. If you would invest 1,173 in Free Market International on November 29, 2024 and sell it today you would earn a total of 50.00 from holding Free Market International or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Free Market International vs. Shelton Funds
Performance |
| Timeline |
| Free Market International |
| Shelton Funds |
Free Market and Shelton Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Free Market and Shelton Funds
The main advantage of trading using opposite Free Market and Shelton Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Free Market 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.| Free Market vs. Morningstar Global Income | Free Market vs. Legg Mason Bw | Free Market vs. Rbb Fund Trust | Free Market vs. T Rowe Price |
| Shelton Funds vs. Pioneer High Income | Shelton Funds vs. Gmo High Yield | Shelton Funds vs. Ab High Income | Shelton Funds vs. Prudential High Yield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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