Correlation Between Elfun Government and Fabwx
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Fabwx 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 Fabwx 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 Fabwx, you can compare the effects of market volatilities on Elfun Government and Fabwx 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 Fabwx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Fabwx.
Diversification Opportunities for Elfun Government and Fabwx
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Fabwx is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Fabwx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabwx 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 Fabwx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabwx has no effect on the direction of Elfun Government i.e., Elfun Government and Fabwx go up and down completely randomly.
Pair Corralation between Elfun Government and Fabwx
If you would invest 1,499 in Fabwx on October 25, 2024 and sell it today you would earn a total of 81.00 from holding Fabwx or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Elfun Government Money vs. Fabwx
Performance |
| Timeline |
| Elfun Government Money |
| Fabwx |
Elfun Government and Fabwx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Fabwx
The main advantage of trading using opposite Elfun Government and Fabwx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Fabwx 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 Fabwx will offset losses from the drop in Fabwx's long position.| Elfun Government vs. Principal Lifetime Hybrid | Elfun Government vs. Qs Large Cap | Elfun Government vs. T Rowe Price | Elfun Government vs. T Rowe Price |
| Fabwx vs. Elfun Government Money | Fabwx vs. Short Term Government Fund | Fabwx vs. Us Government Securities | Fabwx vs. Federated Government Ultrashort |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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