Correlation Between Elfun Diversified and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Franklin Growth 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 Franklin Growth 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 Franklin Growth Allocation, you can compare the effects of market volatilities on Elfun Diversified and Franklin Growth 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Franklin Growth.
Diversification Opportunities for Elfun Diversified and Franklin Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elfun and Franklin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Franklin Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Allo 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 Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Allo has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Franklin Growth go up and down completely randomly.
Pair Corralation between Elfun Diversified and Franklin Growth
Assuming the 90 days horizon Elfun Diversified is expected to generate 1.05 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Elfun Diversified Fund is 1.17 times less risky than Franklin Growth. It trades about 0.11 of its potential returns per unit of risk. Franklin Growth Allocation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,494 in Franklin Growth Allocation on September 15, 2024 and sell it today you would earn a total of 508.00 from holding Franklin Growth Allocation or generate 34.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Franklin Growth Allocation
Performance |
| Timeline |
| Elfun Diversified |
| Franklin Growth Allo |
Elfun Diversified and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Franklin Growth
The main advantage of trading using opposite Elfun Diversified and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Franklin Growth 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 Franklin Growth will offset losses from the drop in Franklin Growth'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 |
| Franklin Growth vs. Lord Abbett Diversified | Franklin Growth vs. Aqr Diversified Arbitrage | Franklin Growth vs. Elfun Diversified Fund | Franklin Growth vs. Fulcrum Diversified Absolute |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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