Correlation Between Payden Emerging and Elfun Government
Can any of the company-specific risk be diversified away by investing in both Payden Emerging 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 Payden Emerging and Elfun Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Emerging Markets and Elfun Government Money, you can compare the effects of market volatilities on Payden Emerging 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 Payden Emerging with a short position of Elfun Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Elfun Government.
Diversification Opportunities for Payden Emerging and Elfun Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Payden and Elfun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets 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 Payden Emerging 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 Payden Emerging Markets 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 Payden Emerging i.e., Payden Emerging and Elfun Government go up and down completely randomly.
Pair Corralation between Payden Emerging and Elfun Government
Assuming the 90 days horizon Payden Emerging Markets is expected to generate 0.73 times more return on investment than Elfun Government. However, Payden Emerging Markets is 1.37 times less risky than Elfun Government. It trades about 0.23 of its potential returns per unit of risk. Elfun Government Money is currently generating about 0.06 per unit of risk. If you would invest 812.00 in Payden Emerging Markets on November 3, 2024 and sell it today you would earn a total of 65.00 from holding Payden Emerging Markets or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.24% |
| Values | Daily Returns |
Payden Emerging Markets vs. Elfun Government Money
Performance |
| Timeline |
| Payden Emerging Markets |
| Elfun Government Money |
Payden Emerging and Elfun Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Emerging and Elfun Government
The main advantage of trading using opposite Payden Emerging and Elfun Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Emerging 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.| Payden Emerging vs. Fidelity New Markets | Payden Emerging vs. Fidelity New Markets | Payden Emerging vs. Fidelity New Markets | Payden Emerging vs. Fidelity New Markets |
| Elfun Government vs. Enhanced Fixed Income | Elfun Government vs. Calvert International Equity | Elfun Government vs. Smallcap World Fund | Elfun Government vs. Aqr Equity 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |