Correlation Between Shelton Funds and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Sp Smallcap 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 Sp Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Funds and Sp Smallcap Index, you can compare the effects of market volatilities on Shelton Funds and Sp Smallcap 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 Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Sp Smallcap.
Diversification Opportunities for Shelton Funds and Sp Smallcap
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shelton and SMLKX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Sp Smallcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap Index 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 Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap Index has no effect on the direction of Shelton Funds i.e., Shelton Funds and Sp Smallcap go up and down completely randomly.
Pair Corralation between Shelton Funds and Sp Smallcap
Assuming the 90 days horizon Shelton Funds is expected to generate 3.66 times less return on investment than Sp Smallcap. But when comparing it to its historical volatility, Shelton Funds is 1.5 times less risky than Sp Smallcap. It trades about 0.08 of its potential returns per unit of risk. Sp Smallcap Index is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,245 in Sp Smallcap Index on August 26, 2024 and sell it today you would earn a total of 169.00 from holding Sp Smallcap Index or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Funds vs. Sp Smallcap Index
Performance |
| Timeline |
| Shelton Funds |
| Sp Smallcap Index |
Shelton Funds and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Funds and Sp Smallcap
The main advantage of trading using opposite Shelton Funds and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap's long position.| Shelton Funds vs. Rbc Microcap Value | Shelton Funds vs. Iaadx | Shelton Funds vs. Acm Dynamic Opportunity | Shelton Funds vs. Rbb Fund |
| Sp Smallcap vs. Gmo Equity Allocation | Sp Smallcap vs. William Blair Large | Sp Smallcap vs. Aqr Large Cap | Sp Smallcap vs. Enhanced Large Pany |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |