Correlation Between Elfun Government and Payden Government
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Payden Government 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 Payden Government 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 Payden Government Fund, you can compare the effects of market volatilities on Elfun Government and Payden Government 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 Payden Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Payden Government.
Diversification Opportunities for Elfun Government and Payden Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Payden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government 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 Payden Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of Elfun Government i.e., Elfun Government and Payden Government go up and down completely randomly.
Pair Corralation between Elfun Government and Payden Government
Assuming the 90 days horizon Elfun Government Money is expected to generate 154.13 times more return on investment than Payden Government. However, Elfun Government is 154.13 times more volatile than Payden Government Fund. It trades about 0.07 of its potential returns per unit of risk. Payden Government Fund is currently generating about 0.06 per unit of risk. If you would invest 100.00 in Elfun Government Money on October 7, 2024 and sell it today you would earn a total of 0.00 from holding Elfun Government Money or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.83% |
| Values | Daily Returns |
Elfun Government Money vs. Payden Government Fund
Performance |
| Timeline |
| Elfun Government Money |
| Payden Government |
Elfun Government and Payden Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Payden Government
The main advantage of trading using opposite Elfun Government and Payden Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Payden Government 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 Payden Government will offset losses from the drop in Payden Government's long position.| Elfun Government vs. Tax Managed Mid Small | Elfun Government vs. Small Cap Stock | Elfun Government vs. Stone Ridge Diversified | Elfun Government vs. Wells Fargo Diversified |
| Payden Government vs. Pioneer Amt Free Municipal | Payden Government vs. Ab Municipal Bond | Payden Government vs. Gurtin California Muni | Payden Government vs. Dreyfus Municipal Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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