Correlation Between First Trust and Elfun Government
Can any of the company-specific risk be diversified away by investing in both First Trust and Elfun 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 First Trust and Elfun Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Preferred and Elfun Government Money, you can compare the effects of market volatilities on First Trust and Elfun 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 First Trust with a short position of Elfun Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Elfun Government.
Diversification Opportunities for First Trust and Elfun Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Elfun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Preferred and Elfun Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Government Money and First Trust 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 First Trust Preferred are associated (or correlated) with Elfun Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Government Money has no effect on the direction of First Trust i.e., First Trust and Elfun Government go up and down completely randomly.
Pair Corralation between First Trust and Elfun Government
If you would invest 1,970 in First Trust Preferred on September 3, 2024 and sell it today you would earn a total of 34.00 from holding First Trust Preferred or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
First Trust Preferred vs. Elfun Government Money
Performance |
| Timeline |
| First Trust Preferred |
| Elfun Government Money |
First Trust and Elfun Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Elfun Government
The main advantage of trading using opposite First Trust and Elfun Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Elfun 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 Elfun Government will offset losses from the drop in Elfun Government's long position.| First Trust vs. Elfun Government Money | First Trust vs. Wilmington Funds | First Trust vs. Blackrock Exchange Portfolio | First Trust vs. Transamerica Funds |
| Elfun Government vs. Touchstone Premium Yield | Elfun Government vs. Limited Term Tax | Elfun Government vs. Bbh Intermediate Municipal | Elfun Government vs. Versatile Bond Portfolio |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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