Correlation Between Shelton Funds and Small Cap
Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Funds and Small Cap Stock, you can compare the effects of market volatilities on Shelton Funds and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Small Cap.
Diversification Opportunities for Shelton Funds and Small Cap
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shelton and Small is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Small Cap Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Stock 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Stock has no effect on the direction of Shelton Funds i.e., Shelton Funds and Small Cap go up and down completely randomly.
Pair Corralation between Shelton Funds and Small Cap
Assuming the 90 days horizon Shelton Funds is expected to generate 0.93 times more return on investment than Small Cap. However, Shelton Funds is 1.07 times less risky than Small Cap. It trades about 0.07 of its potential returns per unit of risk. Small Cap Stock is currently generating about 0.05 per unit of risk. If you would invest 3,306 in Shelton Funds on August 29, 2024 and sell it today you would earn a total of 909.00 from holding Shelton Funds or generate 27.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Funds vs. Small Cap Stock
Performance |
| Timeline |
| Shelton Funds |
| Small Cap Stock |
Shelton Funds and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Funds and Small Cap
The main advantage of trading using opposite Shelton Funds and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Shelton Funds vs. Gamco Global Gold | Shelton Funds vs. Fidelity Advisor Gold | Shelton Funds vs. First Eagle Gold | Shelton Funds vs. Goldman Sachs Centrated |
| Small Cap vs. Franklin Adjustable Government | Small Cap vs. Dreyfus Government Cash | Small Cap vs. Lord Abbett Government | Small Cap vs. Inverse Government Long |
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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