Correlation Between Elfun Diversified and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Amg Southernsun 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 Amg Southernsun 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 Amg Southernsun Equity, you can compare the effects of market volatilities on Elfun Diversified and Amg Southernsun 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 Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Amg Southernsun.
Diversification Opportunities for Elfun Diversified and Amg Southernsun
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elfun and Amg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity 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 Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Amg Southernsun go up and down completely randomly.
Pair Corralation between Elfun Diversified and Amg Southernsun
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 0.43 times more return on investment than Amg Southernsun. However, Elfun Diversified Fund is 2.31 times less risky than Amg Southernsun. It trades about 0.11 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about 0.04 per unit of risk. If you would invest 1,664 in Elfun Diversified Fund on September 12, 2024 and sell it today you would earn a total of 538.00 from holding Elfun Diversified Fund or generate 32.33% 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. Amg Southernsun Equity
Performance |
| Timeline |
| Elfun Diversified |
| Amg Southernsun Equity |
Elfun Diversified and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Amg Southernsun
The main advantage of trading using opposite Elfun Diversified and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.| Elfun Diversified vs. Income Fund Of | Elfun Diversified vs. Income Fund Of | Elfun Diversified vs. Income Fund Of | Elfun Diversified vs. Income Fund Of |
| Amg Southernsun vs. Elfun Diversified Fund | Amg Southernsun vs. Western Asset Diversified | Amg Southernsun vs. Blackrock Conservative Prprdptfinstttnl | Amg Southernsun vs. Calvert Conservative Allocation |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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