Correlation Between Scharf Global and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Shelton Emerging 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 Scharf Global and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Shelton Emerging Markets, you can compare the effects of market volatilities on Scharf Global and Shelton Emerging 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 Scharf Global with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Shelton Emerging.
Diversification Opportunities for Scharf Global and Shelton Emerging
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scharf and Shelton is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Scharf Global i.e., Scharf Global and Shelton Emerging go up and down completely randomly.
Pair Corralation between Scharf Global and Shelton Emerging
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 0.69 times more return on investment than Shelton Emerging. However, Scharf Global Opportunity is 1.44 times less risky than Shelton Emerging. It trades about 0.1 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 3,230 in Scharf Global Opportunity on August 26, 2024 and sell it today you would earn a total of 559.00 from holding Scharf Global Opportunity or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Shelton Emerging Markets
Performance |
| Timeline |
| Scharf Global Opportunity |
| Shelton Emerging Markets |
Scharf Global and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Shelton Emerging
The main advantage of trading using opposite Scharf Global and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Shelton Emerging 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 Emerging will offset losses from the drop in Shelton Emerging's long position.| Scharf Global vs. Blackrock Sm Cap | Scharf Global vs. Balanced Fund Investor | Scharf Global vs. Small Cap Stock | Scharf Global vs. Rational Special Situations |
| Shelton Emerging vs. Abr 7525 Volatility | Shelton Emerging vs. Falcon Focus Scv | Shelton Emerging vs. Scharf Global Opportunity | Shelton Emerging vs. Western Asset Municipal |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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