Correlation Between Barings Global and Elfun Trusts
Can any of the company-specific risk be diversified away by investing in both Barings Global and Elfun Trusts 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 Barings Global and Elfun Trusts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Elfun Trusts Elfun, you can compare the effects of market volatilities on Barings Global and Elfun Trusts 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 Barings Global with a short position of Elfun Trusts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Elfun Trusts.
Diversification Opportunities for Barings Global and Elfun Trusts
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Elfun is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Elfun Trusts Elfun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Trusts Elfun and Barings Global 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 Barings Global Floating are associated (or correlated) with Elfun Trusts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Trusts Elfun has no effect on the direction of Barings Global i.e., Barings Global and Elfun Trusts go up and down completely randomly.
Pair Corralation between Barings Global and Elfun Trusts
Assuming the 90 days horizon Barings Global is expected to generate 2.91 times less return on investment than Elfun Trusts. But when comparing it to its historical volatility, Barings Global Floating is 4.95 times less risky than Elfun Trusts. It trades about 0.2 of its potential returns per unit of risk. Elfun Trusts Elfun is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,654 in Elfun Trusts Elfun on September 20, 2024 and sell it today you would earn a total of 2,050 from holding Elfun Trusts Elfun or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Elfun Trusts Elfun
Performance |
| Timeline |
| Barings Global Floating |
| Elfun Trusts Elfun |
Barings Global and Elfun Trusts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Elfun Trusts
The main advantage of trading using opposite Barings Global and Elfun Trusts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Elfun Trusts 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 Elfun Trusts will offset losses from the drop in Elfun Trusts' long position.| Barings Global vs. Mutual Of America | Barings Global vs. Amg River Road | Barings Global vs. Palm Valley Capital | Barings Global vs. William Blair Small |
| Elfun Trusts vs. Ab Global Bond | Elfun Trusts vs. Barings Global Floating | Elfun Trusts vs. Ab Global Risk | Elfun Trusts vs. Investec Global Franchise |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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