Correlation Between Elfun Government and Dfa Intl
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Dfa Intl 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 Dfa Intl 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 Dfa Intl Core, you can compare the effects of market volatilities on Elfun Government and Dfa Intl 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 Dfa Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Dfa Intl.
Diversification Opportunities for Elfun Government and Dfa Intl
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Dfa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Dfa Intl Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Intl Core 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 Dfa Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Intl Core has no effect on the direction of Elfun Government i.e., Elfun Government and Dfa Intl go up and down completely randomly.
Pair Corralation between Elfun Government and Dfa Intl
Assuming the 90 days horizon Elfun Government is expected to generate 2.37 times less return on investment than Dfa Intl. But when comparing it to its historical volatility, Elfun Government Money is 3.86 times less risky than Dfa Intl. It trades about 0.08 of its potential returns per unit of risk. Dfa Intl Core is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,966 in Dfa Intl Core on September 14, 2024 and sell it today you would earn a total of 182.00 from holding Dfa Intl Core or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Elfun Government Money vs. Dfa Intl Core
Performance |
| Timeline |
| Elfun Government Money |
| Dfa Intl Core |
Elfun Government and Dfa Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Dfa Intl
The main advantage of trading using opposite Elfun Government and Dfa Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Dfa Intl 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 Dfa Intl will offset losses from the drop in Dfa Intl'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 |
| Dfa Intl vs. John Hancock Money | Dfa Intl vs. Chestnut Street Exchange | Dfa Intl vs. Ab Government Exchange | Dfa Intl vs. Elfun 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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