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
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elfun and State is -0.34. 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 4.38 times less return on investment than State Street. But when comparing it to its historical volatility, Elfun Income Fund is 1.25 times less risky than State Street. It trades about 0.09 of its potential returns per unit of risk. State Street Target is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,552 in State Street Target on September 1, 2024 and sell it today you would earn a total of 58.00 from holding State Street Target or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| 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. Jhancock Diversified Macro | Elfun Income vs. American Century Diversified | Elfun Income vs. Oppenheimer International Diversified | Elfun Income vs. The Gabelli Small |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |