Correlation Between Us Government and Shelton Core

Can any of the company-specific risk be diversified away by investing in both Us Government and Shelton Core 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 Us Government and Shelton Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Us Government Securities and Shelton E Value, you can compare the effects of market volatilities on Us Government and Shelton Core 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 Us Government with a short position of Shelton Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Shelton Core.

Diversification Opportunities for Us Government and Shelton Core

-0.75

Correlation Coefficient

Us Government  Shelton Core

Pay attention - limited upside

The 3 months correlation between CAUSX and Shelton is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Shelton E Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton E Value and Us Government 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 Us Government Securities are associated (or correlated) with Shelton Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton E Value has no effect on the direction of Us Government i.e., Us Government and Shelton Core go up and down completely randomly.

Pair Corralation between Us Government and Shelton Core

Assuming the 90 days horizon Us Government Securities is expected to under-perform the Shelton Core. But the mutual fund apears to be less risky and, when comparing its historical volatility, Us Government Securities is 1.86 times less risky than Shelton Core. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Shelton E Value is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,581  in Shelton E Value on September 3, 2024 and sell it today you would earn a total of  121.00  from holding Shelton E Value or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Us Government Securities  vs.  Shelton E Value

Us Government Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Us Government Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Us Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shelton E Value

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton E Value are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Shelton Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Us Government and Shelton Core

The main advantage of trading using opposite Us Government and Shelton Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Shelton Core 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 Core will offset losses from the drop in Shelton Core's long position.

The idea behind Us Government Securities and Shelton E Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.