Correlation Between Elfun Government and American Funds
Can any of the company-specific risk be diversified away by investing in both Elfun Government and American Funds 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 Funds 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 Funds 2020, you can compare the effects of market volatilities on Elfun Government and American Funds 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 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and American Funds.
Diversification Opportunities for Elfun Government and American Funds
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 Funds 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2020 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 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2020 has no effect on the direction of Elfun Government i.e., Elfun Government and American Funds go up and down completely randomly.
Pair Corralation between Elfun Government and American Funds
Assuming the 90 days horizon Elfun Government is expected to generate 6.6 times less return on investment than American Funds. But when comparing it to its historical volatility, Elfun Government Money is 1.73 times less risky than American Funds. It trades about 0.04 of its potential returns per unit of risk. American Funds 2020 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,351 in American Funds 2020 on September 3, 2024 and sell it today you would earn a total of 91.00 from holding American Funds 2020 or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Elfun Government Money vs. American Funds 2020
Performance |
| Timeline |
| Elfun Government Money |
| American Funds 2020 |
Elfun Government and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and American Funds
The main advantage of trading using opposite Elfun Government and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Elfun Government vs. Touchstone Premium Yield | Elfun Government vs. Limited Term Tax | Elfun Government vs. Bbh Intermediate Municipal | Elfun Government vs. Versatile Bond Portfolio |
| American Funds vs. First American Funds | American Funds vs. Elfun Government Money | American Funds vs. Schwab Treasury Money | American Funds vs. Rbc Funds Trust |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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