Correlation Between Elfun Government and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Vanguard Total 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 Vanguard Total 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 Vanguard Total Stock, you can compare the effects of market volatilities on Elfun Government and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Vanguard Total.
Diversification Opportunities for Elfun Government and Vanguard Total
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Elfun Government i.e., Elfun Government and Vanguard Total go up and down completely randomly.
Pair Corralation between Elfun Government and Vanguard Total
Assuming the 90 days horizon Elfun Government Money is expected to generate 29.25 times more return on investment than Vanguard Total. However, Elfun Government is 29.25 times more volatile than Vanguard Total Stock. It trades about 0.04 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about 0.13 per unit of risk. If you would invest 95.00 in Elfun Government Money on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Elfun Government Money or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
Elfun Government Money vs. Vanguard Total Stock
Performance |
| Timeline |
| Elfun Government Money |
| Vanguard Total Stock |
Elfun Government and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Government and Vanguard Total
The main advantage of trading using opposite Elfun Government and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total'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 |
| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard 500 Index | Vanguard Total vs. Vanguard Reit Index |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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