Correlation Between Elfun Diversified and Spirit Of
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Spirit Of 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 Spirit Of 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 Spirit Of America, you can compare the effects of market volatilities on Elfun Diversified and Spirit Of 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 Spirit Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Spirit Of.
Diversification Opportunities for Elfun Diversified and Spirit Of
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elfun and Spirit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America 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 Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Spirit Of go up and down completely randomly.
Pair Corralation between Elfun Diversified and Spirit Of
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 0.53 times more return on investment than Spirit Of. However, Elfun Diversified Fund is 1.88 times less risky than Spirit Of. It trades about 0.19 of its potential returns per unit of risk. Spirit Of America is currently generating about 0.08 per unit of risk. If you would invest 2,171 in Elfun Diversified Fund on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Elfun Diversified Fund or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Spirit Of America
Performance |
| Timeline |
| Elfun Diversified |
| Spirit Of America |
Elfun Diversified and Spirit Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Spirit Of
The main advantage of trading using opposite Elfun Diversified and Spirit Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Spirit Of 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 Spirit Of will offset losses from the drop in Spirit Of's long position.| Elfun Diversified vs. Loomis Sayles Inflation | Elfun Diversified vs. Lord Abbett Inflation | Elfun Diversified vs. Goldman Sachs Inflation | Elfun Diversified vs. Ab Bond Inflation |
| Spirit Of vs. Alliancebernstein Global High | Spirit Of vs. Ab High Income | Spirit Of vs. California High Yield Municipal | Spirit Of vs. Pace High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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