Correlation Between Elfun Diversified and Prudential Core
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Prudential Core 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 Prudential Core 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 Prudential Core Conservative, you can compare the effects of market volatilities on Elfun Diversified and Prudential Core 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 Prudential Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Prudential Core.
Diversification Opportunities for Elfun Diversified and Prudential Core
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elfun and Prudential is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Prudential Core Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Core Cons 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 Prudential Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Core Cons has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Prudential Core go up and down completely randomly.
Pair Corralation between Elfun Diversified and Prudential Core
Assuming the 90 days horizon Elfun Diversified Fund is expected to under-perform the Prudential Core. In addition to that, Elfun Diversified is 1.38 times more volatile than Prudential Core Conservative. It trades about -0.09 of its total potential returns per unit of risk. Prudential Core Conservative is currently generating about -0.08 per unit of volatility. If you would invest 855.00 in Prudential Core Conservative on September 23, 2024 and sell it today you would lose (5.00) from holding Prudential Core Conservative or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Prudential Core Conservative
Performance |
| Timeline |
| Elfun Diversified |
| Prudential Core Cons |
Elfun Diversified and Prudential Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Prudential Core
The main advantage of trading using opposite Elfun Diversified and Prudential Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Prudential Core 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 Prudential Core will offset losses from the drop in Prudential Core'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 |
| Prudential Core vs. Stone Ridge Diversified | Prudential Core vs. Allianzgi Diversified Income | Prudential Core vs. Guggenheim Diversified Income | Prudential Core vs. Elfun 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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