Correlation Between Elfun Trusts and Alphacentric Municipal
Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and Alphacentric Municipal 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 Alphacentric Municipal 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 Alphacentric Municipal Opportunities, you can compare the effects of market volatilities on Elfun Trusts and Alphacentric Municipal 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 Alphacentric Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and Alphacentric Municipal.
Diversification Opportunities for Elfun Trusts and Alphacentric Municipal
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Alphacentric is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Alphacentric Municipal Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Municipal 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 Alphacentric Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Municipal has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Alphacentric Municipal go up and down completely randomly.
Pair Corralation between Elfun Trusts and Alphacentric Municipal
Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 2.85 times more return on investment than Alphacentric Municipal. However, Elfun Trusts is 2.85 times more volatile than Alphacentric Municipal Opportunities. It trades about 0.13 of its potential returns per unit of risk. Alphacentric Municipal Opportunities is currently generating about 0.03 per unit of risk. If you would invest 5,696 in Elfun Trusts Elfun on September 13, 2024 and sell it today you would earn a total of 4,363 from holding Elfun Trusts Elfun or generate 76.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.78% |
| Values | Daily Returns |
Elfun Trusts Elfun vs. Alphacentric Municipal Opportu
Performance |
| Timeline |
| Elfun Trusts Elfun |
| Alphacentric Municipal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Elfun Trusts and Alphacentric Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Trusts and Alphacentric Municipal
The main advantage of trading using opposite Elfun Trusts and Alphacentric Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, Alphacentric Municipal 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 Alphacentric Municipal will offset losses from the drop in Alphacentric Municipal's long position.| Elfun Trusts vs. T Rowe Price | Elfun Trusts vs. Kinetics Market Opportunities | Elfun Trusts vs. Barings Emerging Markets | Elfun Trusts vs. Calvert Developed Market |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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