Correlation Between Shelton Funds and Nasdaq 100

Can any of the company-specific risk be diversified away by investing in both Shelton Funds and Nasdaq 100 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 Funds and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shelton Funds and Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Shelton Funds and Nasdaq 100 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 Funds with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Funds and Nasdaq 100.

Diversification Opportunities for Shelton Funds and Nasdaq 100

1.0

Correlation Coefficient

Shelton Funds  Nasdaq 100

No risk reduction

The 3 months correlation between Shelton and Nasdaq is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Funds and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index and Shelton Funds 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 Funds are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Shelton Funds i.e., Shelton Funds and Nasdaq 100 go up and down completely randomly.

Pair Corralation between Shelton Funds and Nasdaq 100

Assuming the 90 days horizon Shelton Funds is expected to generate 1.0 times more return on investment than Nasdaq 100. However, Shelton Funds is 1.0 times less risky than Nasdaq 100. It trades about 0.05 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.05 per unit of risk. If you would invest  3,912  in Shelton Funds on September 17, 2024 and sell it today you would earn a total of  141.00  from holding Shelton Funds or generate 3.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Shelton Funds   vs.  Nasdaq 100 Index Fund

Shelton Funds

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton Funds are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Shelton Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nasdaq 100 Index

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Index Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Nasdaq 100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shelton Funds and Nasdaq 100

The main advantage of trading using opposite Shelton Funds and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Funds position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.

The idea behind Shelton Funds and Nasdaq 100 Index Fund 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.