Correlation Between Elfun Government and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Absolute Convertible 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 Absolute Convertible 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 Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Elfun Government and Absolute Convertible 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 Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Absolute Convertible.
Diversification Opportunities for Elfun Government and Absolute Convertible
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Absolute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible 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 Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Elfun Government i.e., Elfun Government and Absolute Convertible go up and down completely randomly.
Pair Corralation between Elfun Government and Absolute Convertible
Assuming the 90 days horizon Elfun Government Money is expected to generate 471.65 times more return on investment than Absolute Convertible. However, Elfun Government is 471.65 times more volatile than Absolute Convertible Arbitrage. It trades about 0.05 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about 0.58 per unit of risk. If you would invest 96.00 in Elfun Government Money on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Elfun Government Money or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Elfun Government Money vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Elfun Government Money |
| Absolute Convertible |
Elfun Government and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Absolute Convertible
The main advantage of trading using opposite Elfun Government and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Elfun Government vs. Dreyfus Natural Resources | Elfun Government vs. Gamco Natural Resources | Elfun Government vs. Adams Natural Resources | Elfun Government vs. Gmo Resources |
| Absolute Convertible vs. Multimedia Portfolio Multimedia | Absolute Convertible vs. Nationwide Global Equity | Absolute Convertible vs. Balanced Fund Retail | Absolute Convertible vs. Gmo Global Equity |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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