Correlation Between Shelton Emerging and Sp Smallcap

Can any of the company-specific risk be diversified away by investing in both Shelton Emerging 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 Emerging 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 Emerging Markets and Sp Smallcap Index, you can compare the effects of market volatilities on Shelton Emerging 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 Emerging with a short position of Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Sp Smallcap.

Diversification Opportunities for Shelton Emerging and Sp Smallcap

0.92

Correlation Coefficient

Shelton Emerging  Sp Smallcap

Almost no diversification

The 3 months correlation between Shelton and SMCIX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets 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 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 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 Emerging i.e., Shelton Emerging and Sp Smallcap go up and down completely randomly.

Pair Corralation between Shelton Emerging and Sp Smallcap

Assuming the 90 days horizon Shelton Emerging Markets is expected to generate 0.7 times more return on investment than Sp Smallcap. However, Shelton Emerging Markets is 1.43 times less risky than Sp Smallcap. It trades about 0.16 of its potential returns per unit of risk. Sp Smallcap Index is currently generating about 0.09 per unit of risk. If you would invest  1,772  in Shelton Emerging Markets on May 4, 2025 and sell it today you would earn a total of  141.00  from holding Shelton Emerging Markets or generate 7.96% return on investment over 90 days.

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

Shelton Emerging Markets  vs.  Sp Smallcap Index

Shelton Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Shelton Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sp Smallcap Index

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sp Smallcap Index are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Sp Smallcap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Shelton Emerging and Sp Smallcap

The main advantage of trading using opposite Shelton Emerging and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging 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 Emerging Markets 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.