Correlation Between Shelton Funds and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Locorr Market 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 Locorr Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Funds and Locorr Market Trend, you can compare the effects of market volatilities on Shelton Funds and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Locorr Market.
Diversification Opportunities for Shelton Funds and Locorr Market
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shelton and Locorr is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Shelton Funds i.e., Shelton Funds and Locorr Market go up and down completely randomly.
Pair Corralation between Shelton Funds and Locorr Market
Assuming the 90 days horizon Shelton Funds is expected to generate 1.32 times more return on investment than Locorr Market. However, Shelton Funds is 1.32 times more volatile than Locorr Market Trend. It trades about 0.05 of its potential returns per unit of risk. Locorr Market Trend is currently generating about -0.03 per unit of risk. If you would invest 3,321 in Shelton Funds on September 3, 2024 and sell it today you would earn a total of 573.00 from holding Shelton Funds or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Funds vs. Locorr Market Trend
Performance |
| Timeline |
| Shelton Funds |
| Locorr Market Trend |
Shelton Funds and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Funds and Locorr Market
The main advantage of trading using opposite Shelton Funds and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market'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 |
| Locorr Market vs. Aqr Managed Futures | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. American Beacon Ahl |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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