Correlation Between Elfun Diversified and Mainstay Conservative
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Mainstay Conservative 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 Mainstay Conservative 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 Mainstay Conservative Allocation, you can compare the effects of market volatilities on Elfun Diversified and Mainstay Conservative 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 Mainstay Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Mainstay Conservative.
Diversification Opportunities for Elfun Diversified and Mainstay Conservative
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elfun and Mainstay is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Mainstay Conservative Allocati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Conservative 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 Mainstay Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Conservative has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Mainstay Conservative go up and down completely randomly.
Pair Corralation between Elfun Diversified and Mainstay Conservative
If you would invest 1,124 in Mainstay Conservative Allocation on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Mainstay Conservative Allocation or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Mainstay Conservative Allocati
Performance |
| Timeline |
| Elfun Diversified |
| Mainstay Conservative |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Elfun Diversified and Mainstay Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Mainstay Conservative
The main advantage of trading using opposite Elfun Diversified and Mainstay Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Mainstay Conservative 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 Mainstay Conservative will offset losses from the drop in Mainstay Conservative's long position.The idea behind Elfun Diversified Fund and Mainstay Conservative Allocation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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