Correlation Between Shelton International and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Shelton International and Sp Smallcap 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 International and Sp Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton International Select and Sp Smallcap Index, you can compare the effects of market volatilities on Shelton International and Sp Smallcap 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 International with a short position of Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton International and Sp Smallcap.
Diversification Opportunities for Shelton International and Sp Smallcap
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shelton and SMCIX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shelton International Select and Sp Smallcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap Index and Shelton International 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 International Select are associated (or correlated) with Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap Index has no effect on the direction of Shelton International i.e., Shelton International and Sp Smallcap go up and down completely randomly.
Pair Corralation between Shelton International and Sp Smallcap
Assuming the 90 days horizon Shelton International is expected to generate 1.15 times less return on investment than Sp Smallcap. But when comparing it to its historical volatility, Shelton International Select is 1.89 times less risky than Sp Smallcap. It trades about 0.29 of its potential returns per unit of risk. Sp Smallcap Index is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,888 in Sp Smallcap Index on April 30, 2025 and sell it today you would earn a total of 246.00 from holding Sp Smallcap Index or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton International Select vs. Sp Smallcap Index
Performance |
| Timeline |
| Shelton International |
| Sp Smallcap Index |
Shelton International and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton International and Sp Smallcap
The main advantage of trading using opposite Shelton International and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton International position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap's long position.The idea behind Shelton International Select and Sp Smallcap Index 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.
| Sp Smallcap vs. Sp Midcap Index | Sp Smallcap vs. Sp 500 Index | Sp Smallcap vs. Nasdaq 100 Index Fund | Sp Smallcap vs. Deutsche Sp 500 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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