Correlation Between Balanced Fund and Shelton Funds
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Shelton Funds 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 Balanced Fund and Shelton Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Shelton Funds , you can compare the effects of market volatilities on Balanced Fund and Shelton Funds 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 Balanced Fund with a short position of Shelton Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Shelton Funds.
Diversification Opportunities for Balanced Fund and Shelton Funds
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Shelton is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Shelton Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Funds has no effect on the direction of Balanced Fund i.e., Balanced Fund and Shelton Funds go up and down completely randomly.
Pair Corralation between Balanced Fund and Shelton Funds
Assuming the 90 days horizon Balanced Fund is expected to generate 1.34 times less return on investment than Shelton Funds. But when comparing it to its historical volatility, Balanced Fund Investor is 2.2 times less risky than Shelton Funds. It trades about 0.34 of its potential returns per unit of risk. Shelton Funds is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,005 in Shelton Funds on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Shelton Funds or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Shelton Funds
Performance |
| Timeline |
| Balanced Fund Investor |
| Shelton Funds |
Balanced Fund and Shelton Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Shelton Funds
The main advantage of trading using opposite Balanced Fund and Shelton Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Shelton Funds 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 Funds will offset losses from the drop in Shelton Funds' long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Shelton Funds vs. Locorr Market Trend | Shelton Funds vs. Harbor Diversified International | Shelton Funds vs. Artisan Emerging Markets | Shelton Funds vs. Shelton Emerging Markets |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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