Correlation Between Elfun Trusts and Wilmington Trust
Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and Wilmington Trust 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 Wilmington Trust 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 Wilmington Trust Retirement, you can compare the effects of market volatilities on Elfun Trusts and Wilmington Trust 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 Wilmington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and Wilmington Trust.
Diversification Opportunities for Elfun Trusts and Wilmington Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elfun and Wilmington is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Wilmington Trust Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Trust Ret 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 Wilmington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Trust Ret has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Wilmington Trust go up and down completely randomly.
Pair Corralation between Elfun Trusts and Wilmington Trust
Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 0.89 times more return on investment than Wilmington Trust. However, Elfun Trusts Elfun is 1.12 times less risky than Wilmington Trust. It trades about 0.13 of its potential returns per unit of risk. Wilmington Trust Retirement is currently generating about 0.08 per unit of risk. If you would invest 7,629 in Elfun Trusts Elfun on September 14, 2024 and sell it today you would earn a total of 2,357 from holding Elfun Trusts Elfun or generate 30.9% 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. Wilmington Trust Retirement
Performance |
| Timeline |
| Elfun Trusts Elfun |
| Wilmington Trust Ret |
Elfun Trusts and Wilmington Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Trusts and Wilmington Trust
The main advantage of trading using opposite Elfun Trusts and Wilmington Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, Wilmington Trust 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 Wilmington Trust will offset losses from the drop in Wilmington Trust's long position.| Elfun Trusts vs. Fpa Queens Road | Elfun Trusts vs. Valic Company I | Elfun Trusts vs. Royce Opportunity Fund | Elfun Trusts vs. Vanguard Small Cap Value |
| Wilmington Trust vs. Ashmore Emerging Markets | Wilmington Trust vs. Shelton Emerging Markets | Wilmington Trust vs. Siit Emerging Markets | Wilmington Trust vs. Western Asset Diversified |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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