Correlation Between Elfun Trusts and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and Dow Jones 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 Trusts and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Trusts Elfun and Dow Jones Industrial, you can compare the effects of market volatilities on Elfun Trusts and Dow Jones 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 Trusts with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and Dow Jones.
Diversification Opportunities for Elfun Trusts and Dow Jones
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elfun and Dow is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Elfun Trusts 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 Trusts Elfun are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Dow Jones go up and down completely randomly.
Pair Corralation between Elfun Trusts and Dow Jones
Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 1.34 times more return on investment than Dow Jones. However, Elfun Trusts is 1.34 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 6,184 in Elfun Trusts Elfun on November 7, 2024 and sell it today you would earn a total of 2,861 from holding Elfun Trusts Elfun or generate 46.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Elfun Trusts Elfun vs. Dow Jones Industrial
Performance |
| Timeline |
Elfun Trusts and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Elfun Trusts Elfun
Pair trading matchups for Elfun Trusts
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Elfun Trusts and Dow Jones
The main advantage of trading using opposite Elfun Trusts and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Elfun Trusts vs. Fulcrum Diversified Absolute | Elfun Trusts vs. Jpmorgan Diversified Fund | Elfun Trusts vs. Guggenheim Diversified Income | Elfun Trusts vs. Harbor Diversified International |
| Dow Jones vs. Mako Mining Corp | Dow Jones vs. Reyna Silver Corp | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Trupanion |
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 CEOs Directory module to screen CEOs from public companies around the world.
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