Correlation Between Money Market and Elfun Trusts
Can any of the company-specific risk be diversified away by investing in both Money Market 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 Money Market and Elfun Trusts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Money Market Obligations and Elfun Trusts Elfun, you can compare the effects of market volatilities on Money Market 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 Money Market with a short position of Elfun Trusts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Money Market and Elfun Trusts.
Diversification Opportunities for Money Market and Elfun Trusts
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Money and Elfun is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Money Market Obligations 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 Money Market 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 Money Market Obligations 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 Money Market i.e., Money Market and Elfun Trusts go up and down completely randomly.
Pair Corralation between Money Market and Elfun Trusts
Assuming the 90 days horizon Money Market Obligations is expected to generate 33.09 times more return on investment than Elfun Trusts. However, Money Market is 33.09 times more volatile than Elfun Trusts Elfun. It trades about 0.05 of its potential returns per unit of risk. Elfun Trusts Elfun is currently generating about 0.12 per unit of risk. If you would invest 91.00 in Money Market Obligations on September 25, 2024 and sell it today you would earn a total of 9.00 from holding Money Market Obligations or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.96% |
| Values | Daily Returns |
Money Market Obligations vs. Elfun Trusts Elfun
Performance |
| Timeline |
| Money Market Obligations |
| Elfun Trusts Elfun |
Money Market and Elfun Trusts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Money Market and Elfun Trusts
The main advantage of trading using opposite Money Market and Elfun Trusts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Money Market 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.| Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard 500 Index | Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard Total Stock |
| Elfun Trusts vs. Dws Government Money | Elfun Trusts vs. Ab Government Exchange | Elfun Trusts vs. John Hancock Money | Elfun Trusts vs. Hewitt Money Market |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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