Correlation Between Emerging Markets and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Shelton Emerging 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 Emerging Markets and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Shelton Emerging Markets, you can compare the effects of market volatilities on Emerging Markets and Shelton Emerging 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 Emerging Markets with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Shelton Emerging.
Diversification Opportunities for Emerging Markets and Shelton Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emerging and Shelton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Emerging Markets 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 The Emerging Markets are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Emerging Markets i.e., Emerging Markets and Shelton Emerging go up and down completely randomly.
Pair Corralation between Emerging Markets and Shelton Emerging
Assuming the 90 days horizon The Emerging Markets is expected to generate 1.01 times more return on investment than Shelton Emerging. However, Emerging Markets is 1.01 times more volatile than Shelton Emerging Markets. It trades about -0.1 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.15 per unit of risk. If you would invest 1,987 in The Emerging Markets on September 13, 2024 and sell it today you would lose (75.00) from holding The Emerging Markets or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Emerging Markets vs. Shelton Emerging Markets
Performance |
| Timeline |
| Emerging Markets |
| Shelton Emerging Markets |
Emerging Markets and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Shelton Emerging
The main advantage of trading using opposite Emerging Markets and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Shelton Emerging 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 Emerging will offset losses from the drop in Shelton Emerging's long position.| Emerging Markets vs. Ab Global Risk | Emerging Markets vs. Commonwealth Global Fund | Emerging Markets vs. 361 Global Longshort | Emerging Markets vs. Ab Global Bond |
| Shelton Emerging vs. Shelton Emerging Markets | Shelton Emerging vs. California Tax Free Income | Shelton Emerging vs. Shelton Funds | Shelton Emerging vs. Nasdaq 100 Index Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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