Correlation Between Adams Natural and Elfun Government
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and Elfun Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Elfun Government Money, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of Elfun Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Elfun Government.
Diversification Opportunities for Adams Natural and Elfun Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adams and Elfun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources 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 Adams Natural 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 Adams Natural Resources 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 Adams Natural i.e., Adams Natural and Elfun Government go up and down completely randomly.
Pair Corralation between Adams Natural and Elfun Government
If you would invest 2,167 in Adams Natural Resources on September 4, 2024 and sell it today you would earn a total of 175.00 from holding Adams Natural Resources or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Elfun Government Money
Performance |
| Timeline |
| Adams Natural Resources |
| Elfun Government Money |
Adams Natural and Elfun Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Elfun Government
The main advantage of trading using opposite Adams Natural and Elfun Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| Elfun Government vs. Dreyfus Natural Resources | Elfun Government vs. Gamco Natural Resources | Elfun Government vs. Adams Natural Resources | Elfun Government vs. Gmo Resources |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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