Correlation Between American Funds and Elfun Trusts
Can any of the company-specific risk be diversified away by investing in both American Funds and Elfun Trusts 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 American Funds and Elfun Trusts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Elfun Trusts Elfun, you can compare the effects of market volatilities on American Funds and Elfun Trusts 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 American Funds with a short position of Elfun Trusts. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Elfun Trusts.
Diversification Opportunities for American Funds and Elfun Trusts
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Elfun is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Elfun Trusts Elfun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Trusts Elfun and American Funds 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 American Funds The are associated (or correlated) with Elfun Trusts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Trusts Elfun has no effect on the direction of American Funds i.e., American Funds and Elfun Trusts go up and down completely randomly.
Pair Corralation between American Funds and Elfun Trusts
Assuming the 90 days horizon American Funds The is expected to generate 1.35 times more return on investment than Elfun Trusts. However, American Funds is 1.35 times more volatile than Elfun Trusts Elfun. It trades about 0.13 of its potential returns per unit of risk. Elfun Trusts Elfun is currently generating about 0.15 per unit of risk. If you would invest 5,584 in American Funds The on September 1, 2024 and sell it today you would earn a total of 2,659 from holding American Funds The or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
American Funds The vs. Elfun Trusts Elfun
Performance |
| Timeline |
| American Funds |
| Elfun Trusts Elfun |
American Funds and Elfun Trusts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Elfun Trusts
The main advantage of trading using opposite American Funds and Elfun Trusts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Elfun Trusts 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 Elfun Trusts will offset losses from the drop in Elfun Trusts' long position.| American Funds vs. Old Westbury Short Term | American Funds vs. Ab Select Longshort | American Funds vs. Vanguard Institutional Short Term | American Funds vs. Aqr Long Short Equity |
| Elfun Trusts vs. State Street Target | Elfun Trusts vs. State Street Target | Elfun Trusts vs. Ssga International Stock | Elfun Trusts vs. State Street Target |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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