Correlation Between Dow 2x and Shelton Tactical
Can any of the company-specific risk be diversified away by investing in both Dow 2x and Shelton Tactical 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 Dow 2x and Shelton Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow 2x Strategy and Shelton Tactical Credit, you can compare the effects of market volatilities on Dow 2x and Shelton Tactical 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 Dow 2x with a short position of Shelton Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow 2x and Shelton Tactical.
Diversification Opportunities for Dow 2x and Shelton Tactical
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Shelton is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow 2x Strategy and Shelton Tactical Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Tactical Credit and Dow 2x 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 Dow 2x Strategy are associated (or correlated) with Shelton Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Tactical Credit has no effect on the direction of Dow 2x i.e., Dow 2x and Shelton Tactical go up and down completely randomly.
Pair Corralation between Dow 2x and Shelton Tactical
Assuming the 90 days horizon Dow 2x Strategy is expected to under-perform the Shelton Tactical. In addition to that, Dow 2x is 4.63 times more volatile than Shelton Tactical Credit. It trades about -0.32 of its total potential returns per unit of risk. Shelton Tactical Credit is currently generating about -0.33 per unit of volatility. If you would invest 1,033 in Shelton Tactical Credit on October 9, 2024 and sell it today you would lose (25.00) from holding Shelton Tactical Credit or give up 2.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow 2x Strategy vs. Shelton Tactical Credit
Performance |
| Timeline |
| Dow 2x Strategy |
| Shelton Tactical Credit |
Dow 2x and Shelton Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dow 2x and Shelton Tactical
The main advantage of trading using opposite Dow 2x and Shelton Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow 2x position performs unexpectedly, Shelton Tactical 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 Shelton Tactical will offset losses from the drop in Shelton Tactical's long position.| Dow 2x vs. Sp 500 2x | Dow 2x vs. Inverse Dow 2x | Dow 2x vs. Nasdaq 100 2x Strategy | Dow 2x vs. Russell 2000 2x |
| Shelton Tactical vs. Shelton Emerging Markets | Shelton Tactical vs. California Tax Free Income | Shelton Tactical vs. Shelton Funds | Shelton Tactical vs. Nasdaq 100 Index Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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