Correlation Between Small Cap and Shelton Funds
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Shelton Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Shelton Funds , you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Shelton Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Shelton Funds.
Diversification Opportunities for Small Cap and Shelton Funds
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small and Shelton is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Shelton Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Funds and Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Shelton Funds go up and down completely randomly.
Pair Corralation between Small Cap and Shelton Funds
Assuming the 90 days horizon Small Cap Stock is expected to generate 0.85 times more return on investment than Shelton Funds. However, Small Cap Stock is 1.17 times less risky than Shelton Funds. It trades about 0.2 of its potential returns per unit of risk. Shelton Funds is currently generating about 0.02 per unit of risk. If you would invest 1,327 in Small Cap Stock on October 23, 2024 and sell it today you would earn a total of 51.00 from holding Small Cap Stock or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Shelton Funds
Performance |
| Timeline |
| Small Cap Stock |
| Shelton Funds |
Small Cap and Shelton Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Shelton Funds
The main advantage of trading using opposite Small Cap and Shelton Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Ab High Income | Small Cap vs. Dunham High Yield | Small Cap vs. Ab High Income | Small Cap vs. Lord Abbett Short |
| Shelton Funds vs. Fidelity Small Cap | Shelton Funds vs. Ultrasmall Cap Profund Ultrasmall Cap | Shelton Funds vs. Vanguard Small Cap Value | Shelton Funds vs. William Blair Small |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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