Correlation Between Elfun Income and State Street
Can any of the company-specific risk be diversified away by investing in both Elfun Income and State Street 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 Elfun Income and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Income Fund and State Street Target, you can compare the effects of market volatilities on Elfun Income and State Street 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 Elfun Income with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Income and State Street.
Diversification Opportunities for Elfun Income and State Street
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elfun and State is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Income Fund and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target and Elfun Income 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 Elfun Income Fund are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Elfun Income i.e., Elfun Income and State Street go up and down completely randomly.
Pair Corralation between Elfun Income and State Street
Assuming the 90 days horizon Elfun Income is expected to generate 1.88 times less return on investment than State Street. In addition to that, Elfun Income is 1.12 times more volatile than State Street Target. It trades about 0.12 of its total potential returns per unit of risk. State Street Target is currently generating about 0.24 per unit of volatility. If you would invest 1,284 in State Street Target on September 14, 2024 and sell it today you would earn a total of 17.00 from holding State Street Target or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Elfun Income Fund vs. State Street Target
Performance |
| Timeline |
| Elfun Income |
| State Street Target |
Elfun Income and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Income and State Street
The main advantage of trading using opposite Elfun Income and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Income position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Elfun Income vs. State Street Target | Elfun Income vs. State Street Target | Elfun Income vs. Ssga International Stock | Elfun Income vs. State Street Target |
| State Street vs. Qs Growth Fund | State Street vs. Pace Smallmedium Growth | State Street vs. L Abbett Growth | State Street vs. Vy Baron Growth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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