Correlation Between Nasdaq-100 Index and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index 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 Nasdaq-100 Index and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Shelton Emerging Markets, you can compare the effects of market volatilities on Nasdaq-100 Index 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 Nasdaq-100 Index with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Shelton Emerging.
Diversification Opportunities for Nasdaq-100 Index and Shelton Emerging
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NASDAQ-100 and Shelton is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund 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 Nasdaq-100 Index 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 Nasdaq 100 Index Fund 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 Nasdaq-100 Index i.e., Nasdaq-100 Index and Shelton Emerging go up and down completely randomly.
Pair Corralation between Nasdaq-100 Index and Shelton Emerging
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.35 times more return on investment than Shelton Emerging. However, Nasdaq-100 Index is 1.35 times more volatile than Shelton Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.22 per unit of risk. If you would invest 3,916 in Nasdaq 100 Index Fund on August 29, 2024 and sell it today you would earn a total of 77.00 from holding Nasdaq 100 Index Fund or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Shelton Emerging Markets
Performance |
| Timeline |
| Nasdaq 100 Index |
| Shelton Emerging Markets |
Nasdaq-100 Index and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Index and Shelton Emerging
The main advantage of trading using opposite Nasdaq-100 Index and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Index 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.| Nasdaq-100 Index vs. Virtus Seix Government | Nasdaq-100 Index vs. Franklin Adjustable Government | Nasdaq-100 Index vs. Us Government Securities | Nasdaq-100 Index vs. Prudential Government Income |
| Shelton Emerging vs. Astor Longshort Fund | Shelton Emerging vs. Sterling Capital Short | Shelton Emerging vs. Ambrus Core Bond | Shelton Emerging vs. Multisector Bond Sma |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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