Correlation Between Elfun Trusts and Short Precious

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and Short Precious 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 Short Precious 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 Short Precious Metals, you can compare the effects of market volatilities on Elfun Trusts and Short Precious 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 Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and Short Precious.

Diversification Opportunities for Elfun Trusts and Short Precious

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Elfun and Short is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals 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 Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Short Precious go up and down completely randomly.

Pair Corralation between Elfun Trusts and Short Precious

Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 0.33 times more return on investment than Short Precious. However, Elfun Trusts Elfun is 3.01 times less risky than Short Precious. It trades about 0.11 of its potential returns per unit of risk. Short Precious Metals is currently generating about -0.2 per unit of risk. If you would invest  9,930  in Elfun Trusts Elfun on September 13, 2024 and sell it today you would earn a total of  129.00  from holding Elfun Trusts Elfun or generate 1.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Elfun Trusts Elfun  vs.  Short Precious Metals

 Performance 
       Timeline  
Elfun Trusts Elfun 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Elfun Trusts may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Short Precious Metals 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Short Precious Metals are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Short Precious is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Elfun Trusts and Short Precious Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elfun Trusts and Short Precious

The main advantage of trading using opposite Elfun Trusts and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' long position.
The idea behind Elfun Trusts Elfun and Short Precious Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk