Correlation Between Shelton Emerging and Real Estate

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Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Real Estate 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 Shelton Emerging and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Real Estate Ultrasector, you can compare the effects of market volatilities on Shelton Emerging and Real Estate 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 Shelton Emerging with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Real Estate.

Diversification Opportunities for Shelton Emerging and Real Estate

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Shelton and Real is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Real Estate Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Ultrasector and Shelton Emerging 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 Shelton Emerging Markets are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Ultrasector has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Real Estate go up and down completely randomly.

Pair Corralation between Shelton Emerging and Real Estate

Assuming the 90 days horizon Shelton Emerging is expected to generate 2.6 times less return on investment than Real Estate. But when comparing it to its historical volatility, Shelton Emerging Markets is 1.77 times less risky than Real Estate. It trades about 0.02 of its potential returns per unit of risk. Real Estate Ultrasector is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,490  in Real Estate Ultrasector on September 19, 2024 and sell it today you would earn a total of  541.00  from holding Real Estate Ultrasector or generate 15.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shelton Emerging Markets  vs.  Real Estate Ultrasector

 Performance 
       Timeline  
Shelton Emerging Markets 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Shelton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Shelton Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Real Estate Ultrasector 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Real Estate Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Shelton Emerging and Real Estate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shelton Emerging and Real Estate

The main advantage of trading using opposite Shelton Emerging and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.
The idea behind Shelton Emerging Markets and Real Estate Ultrasector 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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