Correlation Between Elfun Government and Prudential Muni
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Prudential Muni 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 Prudential Muni 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 Prudential Muni High, you can compare the effects of market volatilities on Elfun Government and Prudential Muni 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 Prudential Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Prudential Muni.
Diversification Opportunities for Elfun Government and Prudential Muni
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Prudential Muni High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Muni High 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 Prudential Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Muni High has no effect on the direction of Elfun Government i.e., Elfun Government and Prudential Muni go up and down completely randomly.
Pair Corralation between Elfun Government and Prudential Muni
If you would invest 939.00 in Prudential Muni High on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Prudential Muni High or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Elfun Government Money vs. Prudential Muni High
Performance |
| Timeline |
| Elfun Government Money |
| Prudential Muni High |
Elfun Government and Prudential Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Prudential Muni
The main advantage of trading using opposite Elfun Government and Prudential Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Prudential Muni 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 Prudential Muni will offset losses from the drop in Prudential Muni's long position.| Elfun Government vs. T Rowe Price | Elfun Government vs. Qs Large Cap | Elfun Government vs. Arrow Managed Futures | Elfun Government vs. Federated Global Allocation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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