Correlation Between Vela Large and Shelton Tactical
Can any of the company-specific risk be diversified away by investing in both Vela Large 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 Vela Large and Shelton Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vela Large Cap and Shelton Tactical Credit, you can compare the effects of market volatilities on Vela Large 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 Vela Large with a short position of Shelton Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vela Large and Shelton Tactical.
Diversification Opportunities for Vela Large and Shelton Tactical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vela and Shelton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vela Large Cap 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 Vela Large 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 Vela Large Cap 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 Vela Large i.e., Vela Large and Shelton Tactical go up and down completely randomly.
Pair Corralation between Vela Large and Shelton Tactical
Assuming the 90 days horizon Vela Large Cap is expected to under-perform the Shelton Tactical. In addition to that, Vela Large is 3.58 times more volatile than Shelton Tactical Credit. It trades about -0.31 of its total potential returns per unit of risk. Shelton Tactical Credit is currently generating about -0.38 per unit of volatility. If you would invest 1,038 in Shelton Tactical Credit on October 7, 2024 and sell it today you would lose (30.00) from holding Shelton Tactical Credit or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vela Large Cap vs. Shelton Tactical Credit
Performance |
| Timeline |
| Vela Large Cap |
| Shelton Tactical Credit |
Vela Large and Shelton Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vela Large and Shelton Tactical
The main advantage of trading using opposite Vela Large and Shelton Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vela Large 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.| Vela Large vs. Pace Large Value | Vela Large vs. Large Cap Growth Profund | Vela Large vs. Vest Large Cap | Vela Large vs. Touchstone Large Cap |
| Shelton Tactical vs. Virtus Multi Strategy Target | Shelton Tactical vs. Oberweis Emerging Growth | Shelton Tactical vs. Dow 2x Strategy | Shelton Tactical vs. Origin 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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