Correlation Between Elfun Government and First Trust
Can any of the company-specific risk be diversified away by investing in both Elfun Government and First Trust 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 First Trust 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 First Trust Preferred, you can compare the effects of market volatilities on Elfun Government and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and First Trust.
Diversification Opportunities for Elfun Government and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and First Trust Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Preferred 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Preferred has no effect on the direction of Elfun Government i.e., Elfun Government and First Trust go up and down completely randomly.
Pair Corralation between Elfun Government and First Trust
Assuming the 90 days horizon Elfun Government is expected to generate 3.36 times less return on investment than First Trust. In addition to that, Elfun Government is 1.37 times more volatile than First Trust Preferred. It trades about 0.06 of its total potential returns per unit of risk. First Trust Preferred is currently generating about 0.27 per unit of volatility. If you would invest 1,875 in First Trust Preferred on September 3, 2024 and sell it today you would earn a total of 129.00 from holding First Trust Preferred or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.69% |
| Values | Daily Returns |
Elfun Government Money vs. First Trust Preferred
Performance |
| Timeline |
| Elfun Government Money |
| First Trust Preferred |
Elfun Government and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and First Trust
The main advantage of trading using opposite Elfun Government and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's 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 |
| First Trust vs. Elfun Government Money | First Trust vs. Wilmington Funds | First Trust vs. Blackrock Exchange Portfolio | First Trust vs. Transamerica Funds |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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