Correlation Between Shelton Funds and Health Care
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Health Care 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 Shelton Funds and Health Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Funds and Health Care Ultrasector, you can compare the effects of market volatilities on Shelton Funds and Health Care 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 Shelton Funds with a short position of Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Health Care.
Diversification Opportunities for Shelton Funds and Health Care
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shelton and Health is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Health Care Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Ultrasector and Shelton 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 Shelton Funds are associated (or correlated) with Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Ultrasector has no effect on the direction of Shelton Funds i.e., Shelton Funds and Health Care go up and down completely randomly.
Pair Corralation between Shelton Funds and Health Care
Assuming the 90 days horizon Shelton Funds is expected to generate 1.17 times more return on investment than Health Care. However, Shelton Funds is 1.17 times more volatile than Health Care Ultrasector. It trades about 0.08 of its potential returns per unit of risk. Health Care Ultrasector is currently generating about 0.01 per unit of risk. If you would invest 2,529 in Shelton Funds on September 3, 2024 and sell it today you would earn a total of 1,365 from holding Shelton Funds or generate 53.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Funds vs. Health Care Ultrasector
Performance |
| Timeline |
| Shelton Funds |
| Health Care Ultrasector |
Shelton Funds and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Funds and Health Care
The main advantage of trading using opposite Shelton Funds and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care's long position.| Shelton Funds vs. Touchstone Small Cap | Shelton Funds vs. Chartwell Small Cap | Shelton Funds vs. Rbc Small Cap | Shelton Funds vs. Artisan Small Cap |
| Health Care vs. Semiconductor Ultrasector Profund | Health Care vs. Pharmaceuticals Ultrasector Profund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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