Correlation Between Shelton Funds and Sp 500
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Sp 500 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 500 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 500 Index, you can compare the effects of market volatilities on Shelton Funds and Sp 500 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 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Sp 500.
Diversification Opportunities for Shelton Funds and Sp 500
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shelton and SPFIX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Sp 500 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 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 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Index has no effect on the direction of Shelton Funds i.e., Shelton Funds and Sp 500 go up and down completely randomly.
Pair Corralation between Shelton Funds and Sp 500
Assuming the 90 days horizon Shelton Funds is expected to generate 1.36 times more return on investment than Sp 500. However, Shelton Funds is 1.36 times more volatile than Sp 500 Index. It trades about 0.1 of its potential returns per unit of risk. Sp 500 Index is currently generating about 0.13 per unit of risk. If you would invest 3,097 in Shelton Funds on August 26, 2024 and sell it today you would earn a total of 1,081 from holding Shelton Funds or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Funds vs. Sp 500 Index
Performance |
| Timeline |
| Shelton Funds |
| Sp 500 Index |
Shelton Funds and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Funds and Sp 500
The main advantage of trading using opposite Shelton Funds and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Sp 500 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 500 will offset losses from the drop in Sp 500'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 500 vs. Sp Midcap Index | Sp 500 vs. Sp Smallcap Index | Sp 500 vs. Deutsche Equity 500 | Sp 500 vs. Dreyfus Institutional Sp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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