Correlation Between Elfun Government and Alger Small
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Alger Small 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 Government and Alger Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Government Money and Alger Small Cap, you can compare the effects of market volatilities on Elfun Government and Alger Small 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 Government with a short position of Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Alger Small.
Diversification Opportunities for Elfun Government and Alger Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Alger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap and Elfun Government 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 Government Money are associated (or correlated) with Alger Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of Elfun Government i.e., Elfun Government and Alger Small go up and down completely randomly.
Pair Corralation between Elfun Government and Alger Small
Assuming the 90 days horizon Elfun Government Money is expected to generate 21.73 times more return on investment than Alger Small. However, Elfun Government is 21.73 times more volatile than Alger Small Cap. It trades about 0.06 of its potential returns per unit of risk. Alger Small Cap is currently generating about 0.05 per unit of risk. If you would invest 366.00 in Elfun Government Money on September 12, 2024 and sell it today you would lose (266.00) from holding Elfun Government Money or give up 72.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.82% |
| Values | Daily Returns |
Elfun Government Money vs. Alger Small Cap
Performance |
| Timeline |
| Elfun Government Money |
| Alger Small Cap |
Elfun Government and Alger Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Alger Small
The main advantage of trading using opposite Elfun Government and Alger Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Alger Small 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 Alger Small will offset losses from the drop in Alger Small's long position.| Elfun Government vs. Vanguard Total Stock | Elfun Government vs. Vanguard 500 Index | Elfun Government vs. Vanguard Total Stock | Elfun Government vs. Vanguard Total Stock |
| Alger Small vs. Chestnut Street Exchange | Alger Small vs. Elfun Government Money | Alger Small vs. Edward Jones Money | Alger Small vs. Cref Money 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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