Correlation Between Elfun Trusts and State Street
Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and State Street 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 State Street 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 State Street Core, you can compare the effects of market volatilities on Elfun Trusts and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and State Street.
Diversification Opportunities for Elfun Trusts and State Street
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Elfun and State is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and State Street Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Core 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Core has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and State Street go up and down completely randomly.
Pair Corralation between Elfun Trusts and State Street
Assuming the 90 days horizon Elfun Trusts is expected to generate 1.07 times less return on investment than State Street. In addition to that, Elfun Trusts is 1.02 times more volatile than State Street Core. It trades about 0.13 of its total potential returns per unit of risk. State Street Core is currently generating about 0.14 per unit of volatility. If you would invest 8,549 in State Street Core on August 29, 2024 and sell it today you would earn a total of 231.00 from holding State Street Core or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Trusts Elfun vs. State Street Core
Performance |
| Timeline |
| Elfun Trusts Elfun |
| State Street Core |
Elfun Trusts and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Trusts and State Street
The main advantage of trading using opposite Elfun Trusts and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Elfun Trusts vs. Mesirow Financial Small | Elfun Trusts vs. Barings Active Short | Elfun Trusts vs. Bbh Intermediate Municipal | Elfun Trusts vs. Transamerica Funds |
| State Street vs. Jhancock Diversified Macro | State Street vs. Massmutual Premier Diversified | State Street vs. Vanguard Strategic Small Cap | State Street vs. T Rowe Price |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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