Correlation Between Elfun Government and American Balanced
Can any of the company-specific risk be diversified away by investing in both Elfun Government and American Balanced 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 American Balanced 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 American Balanced Fund, you can compare the effects of market volatilities on Elfun Government and American Balanced 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 American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and American Balanced.
Diversification Opportunities for Elfun Government and American Balanced
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced 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 American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Elfun Government i.e., Elfun Government and American Balanced go up and down completely randomly.
Pair Corralation between Elfun Government and American Balanced
If you would invest 3,582 in American Balanced Fund on September 16, 2024 and sell it today you would earn a total of 102.00 from holding American Balanced Fund or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Elfun Government Money vs. American Balanced Fund
Performance |
| Timeline |
| Elfun Government Money |
| American Balanced |
Elfun Government and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and American Balanced
The main advantage of trading using opposite Elfun Government and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced'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 |
| American Balanced vs. Hewitt Money Market | American Balanced vs. Elfun Government Money | American Balanced vs. Ab Government Exchange | American Balanced vs. Prudential Government Money |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |