Correlation Between Health Care and Shelton Funds
Can any of the company-specific risk be diversified away by investing in both Health Care 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 Health Care and Shelton Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Ultrasector and Shelton Funds , you can compare the effects of market volatilities on Health Care 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 Health Care with a short position of Shelton Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Shelton Funds.
Diversification Opportunities for Health Care and Shelton Funds
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Health and Shelton is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Ultrasector and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and Health Care 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 Health Care Ultrasector 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 Health Care i.e., Health Care and Shelton Funds go up and down completely randomly.
Pair Corralation between Health Care and Shelton Funds
Assuming the 90 days horizon Health Care Ultrasector is expected to generate 0.67 times more return on investment than Shelton Funds. However, Health Care Ultrasector is 1.49 times less risky than Shelton Funds. It trades about 0.0 of its potential returns per unit of risk. Shelton Funds is currently generating about -0.08 per unit of risk. If you would invest 8,642 in Health Care Ultrasector on September 3, 2024 and sell it today you would lose (18.00) from holding Health Care Ultrasector or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Ultrasector vs. Shelton Funds
Performance |
| Timeline |
| Health Care Ultrasector |
| Shelton Funds |
Health Care and Shelton Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Shelton Funds
The main advantage of trading using opposite Health Care and Shelton Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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.| Health Care vs. Semiconductor Ultrasector Profund | Health Care vs. Pharmaceuticals Ultrasector Profund |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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