Correlation Between Ep Emerging and Shelton Emerging

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

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

Diversification Opportunities for Ep Emerging and Shelton Emerging

0.97

Correlation Coefficient

Ep Emerging  Shelton Emerging

Almost no diversification

The 3 months correlation between EPASX and Shelton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Ep 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 Ep Emerging Markets are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Ep Emerging i.e., Ep Emerging and Shelton Emerging go up and down completely randomly.

Pair Corralation between Ep Emerging and Shelton Emerging

Assuming the 90 days horizon Ep Emerging is expected to generate 1.21 times less return on investment than Shelton Emerging. But when comparing it to its historical volatility, Ep Emerging Markets is 1.52 times less risky than Shelton Emerging. It trades about 0.2 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,772  in Shelton Emerging Markets on May 5, 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

Ep Emerging Markets  vs.  Shelton Emerging Markets

Ep Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ep Emerging Markets are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ep Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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.

Pair Trading with Ep Emerging and Shelton Emerging

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

The idea behind Ep Emerging Markets and Shelton Emerging Markets 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 Global Correlations module to find global opportunities by holding instruments from different markets.