Correlation Between Elfun Government and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Prudential Financial 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 Financial 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 Financial Services, you can compare the effects of market volatilities on Elfun Government and Prudential Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Prudential Financial.
Diversification Opportunities for Elfun Government and Prudential Financial
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 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Elfun Government i.e., Elfun Government and Prudential Financial go up and down completely randomly.
Pair Corralation between Elfun Government and Prudential Financial
Assuming the 90 days horizon Elfun Government Money is expected to generate 24.92 times more return on investment than Prudential Financial. However, Elfun Government is 24.92 times more volatile than Prudential Financial Services. It trades about 0.05 of its potential returns per unit of risk. Prudential Financial Services is currently generating about 0.13 per unit of risk. If you would invest 96.00 in Elfun Government Money on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Elfun Government Money or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.17% |
| Values | Daily Returns |
Elfun Government Money vs. Prudential Financial Services
Performance |
| Timeline |
| Elfun Government Money |
| Prudential Financial |
Elfun Government and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Prudential Financial
The main advantage of trading using opposite Elfun Government and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Prudential Financial 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 Financial will offset losses from the drop in Prudential Financial'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 |
| Prudential Financial vs. Aig Government Money | Prudential Financial vs. Franklin Adjustable Government | Prudential Financial vs. Elfun Government Money | Prudential Financial vs. Schwab 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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