Correlation Between Elfun Diversified and Ab Global
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Ab Global 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 Diversified and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and Ab Global Real, you can compare the effects of market volatilities on Elfun Diversified and Ab Global 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 Diversified with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Ab Global.
Diversification Opportunities for Elfun Diversified and Ab Global
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elfun and AEEIX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Elfun Diversified 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 Diversified Fund are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Ab Global go up and down completely randomly.
Pair Corralation between Elfun Diversified and Ab Global
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 0.55 times more return on investment than Ab Global. However, Elfun Diversified Fund is 1.83 times less risky than Ab Global. It trades about 0.1 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.03 per unit of risk. If you would invest 1,667 in Elfun Diversified Fund on September 26, 2024 and sell it today you would earn a total of 508.00 from holding Elfun Diversified Fund or generate 30.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Ab Global Real
Performance |
| Timeline |
| Elfun Diversified |
| Ab Global Real |
Elfun Diversified and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Ab Global
The main advantage of trading using opposite Elfun Diversified and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. Ssga International Stock | Elfun Diversified vs. State Street Target |
| Ab Global vs. Global Diversified Income | Ab Global vs. Federated Hermes Conservative | Ab Global vs. Elfun Diversified Fund | Ab Global vs. Jpmorgan Diversified Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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